Unemployment expectations: A socio-demographic analysis of the effect of news

Petar Sorić, Ivana Lolić, Oscar Claveria, Enric Monte and Salvador Torra

Labour Economics, 2019, vol. 60, issue C, 64-74

Abstract: In this study, we evaluate the effect of news on consumer unemployment expectations for sixteen socio-demographic groups. To this end, we construct an unemployment sentiment indicator and extract news about several economic variables. By means of genetic programming we estimate symbolic regressions that link unemployment rates in the Euro Area to qualitative expectations about a wide range of economic variables. We then use the evolved expressions to compute unemployment expectations for each consumer group. We first assess the out-of-sample forecast accuracy of the evolved indicators, obtaining better forecasts for the leading unemployment sentiment indicator than for the coincident one. Results are similar across the different socio-demographic groups. The best forecast results are obtained for respondents between 30 and 49 years. The group where we observe the bigger differences among categories is the occupation, where the lowest forecast errors are obtained for the unemployed respondents. Next, we link news about inflation, industrial production, and stock markets to unemployment expectations. With this aim we match positive and negative news with consumers’ unemployment sentiment using a distributed lag regression model for each news item. We find asymmetries in the responses of consumers’ unemployment expectations to economic news: they tend to be stronger in the case of negative news, especially in the case of inflation.

Keywords: Unemployment; Expectations; News; Consumer behaviour; Forecasting; Genetic programming (search for similar items in EconPapers)
JEL-codes: C53 C55 D12 E24 E27 J10 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927537119300582
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:60:y:2019:i:c:p:64-74

DOI: 10.1016/j.labeco.2019.06.002

Access Statistics for this article

Labour Economics is currently edited by A. Ichino

More articles in Labour Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().