A new indicator for nowcasting employment subject to social security contributions in Germany

Christian Hutter

Journal for Labour Market Research, 2020, vol. 54, issue 1, 1-10

Abstract: Abstract Contrary to the number of unemployed or vacancies, the number of employees subject to social security contributions (SSC) for Germany is published after a time lag of 2 months. Furthermore, there is a waiting period of 6 months until the values are not revised any more. This paper uses monthly data on the number of people subject to compulsory health insurance (CHI) as auxiliary variable to better nowcast SSC. Statistical evaluation tests using real-time data show that CHI significantly improves nowcast accuracy compared to purely autoregressive benchmark models. The mean squared prediction error for nowcasts of SSC can be reduced by approximately 20%. In addition, CHI outperforms alternative candidate variables such as unemployment, vacancies and industrial production.

Keywords: Nowcasting; Real-time data; Employees; Social security contributions; Compulsory health insurance (search for similar items in EconPapers)
JEL-codes: C53 E24 E27 J21 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1186/s12651-020-00274-w

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