LOGO
Analysis of
Unemployment
Team #4
Qi Li
Trung Le
David Petit
Brian Weinberg
Dwaraka Polakam
Doug Skipper-Dotta
Table of Contents
1
Concepts of Unemployment
2
Descriptive Data Analysis
3
Statistical Analysis
4
Conclusions
5
Questions?
Team #4
Concepts of Unemployment
Population
Employed
Unemployed
Not Looking
Labor
Labor Force: People willing
to Force
work at market equilibrium wage, both
employed and unemployed
Unemployment Rate: Number of Unemployed/Labor Force
Keynesian View: Unemployment consists of excess labor supply in
market economy
Classical View: The unemployed consist of those searching for jobs
Group #4
Descriptive Statistics
 Data from prior studies
Team #4
Variables
 Unemployment Rate
 No Degree/Degree
 Men/Women
 White/Minority
 Other Rates
 Crime Rate
 Suicide Rate
 Welfare Budget
 Annual Income Per
Capita
Descriptive Statistics
 Histograms
 Unemp Rate
 Crime Rate
 Annual Income
 Welfare Budget
 Suicide Rate
Team #4
Descriptive Statistics
 Histograms
Unemp Rate
No Degree
Women
White
Minor
Men
Degree
Team #4
Exploratory Data Analysis
 Unemployment
rates between
Men and Women
have no
significant
difference


High f-test
probability
A labor market
that does not
discriminate on
the basis of sex
Test for Equality of Means Between Series
Date: 11/25/10 Time: 21:04
Sample: 1 10
Included observations: 10
Method
df
Value
Probability
t-test
18 -0.619531
0.5433
Satterthwaite-Welch t-test*
15.10255 -0.619531
0.5448
Anova F-test
(1, 18)
0.383819
0.5433
Welch F-test*
(1, 15.1025)
0.383819
0.5448
*Test allows for unequal cell variances
Analysis of Variance
Source of Variation
df Sum of Sq.
Mean Sq.
Between
1
0.8405
0.8405
Within
18
39.417
2.189833
Total
19
40.2575
2.118816
Category Statistics
Variable
Count
Mean
Std. Dev. Std Mean Err
WOMEN_UNEMP
10
5.32
1.109354
0.350809
MEN_UNEMP
10
5.73
1.774542
0.56116
All
20
5.525
1.455615
0.325485
Team #4
Exploratory Data Analysis
 Unemployment
Rate is Regressed
against male
unemployment
rate and female
unemployment
rate
 The regression is
Significant as
seen by the F-stat
 The variables are
both equally
significant in the
unemployment
rate as seen by
their the t-stat
 Therefore male
and female
unemployment
rates are very
close.
Dependent Variable: UNEMP_RATE
Method: Least Squares
Date: 11/25/10 Time: 21:20
Sample: 1 10
Included observations: 10
Variable
Coefficient
Std. Error
t-Statistic Prob.
C
0.014542
0.109522
0.132776 0.8981
MEN_UNEMP
0.536652
0.037684
WOMEN_UNEMP
0.460234
0.060281
14.2407
0
7.634859 0.0001
R-squared
0.999796
Mean dependent var
5.538
Adjusted R-squared
0.999738
S.D. dependent var
1.4607
S.E. of regression
0.023633
Akaike info criterion
-4.409
Sum squared resid
0.00391
Schwarz criterion
-4.318
Log likelihood
25.04513
Hannan-Quinn criter. -4.5086
F-statistic
17187.56
Durbin-Watson stat
Prob(F-statistic)
3.3868
0
Team #4
Exploratory Data Analysis
 Without a
constant, the
regression
variables have
even greater
significance
Dependent Variable: UNEMP_RATE
Method: Least Squares
Date: 11/25/10 Time: 21:15
Sample: 1 10
Included observations: 10
Variable
Coefficient
Std. Error t-Statistic
MEN_UNEMP
0.531968
0.01241 42.86486
0
0.468
0.013667 34.24331
0
0.999796
Mean dependent var
5.538
0.99977
S.D. dependent var
1.460706
S.E. of regression
0.022134
Akaike info criterion
-4.60651
Sum squared resid
0.003919
Schwarz criterion
-4.54599
Log likelihood
25.03255
Hannan-Quinn criter.
Durbin-Watson stat
3.327676
WOMEN_UNEMP
R-squared
Adjusted R-squared
Prob.
-4.6729
Team #4
Exploratory Data Analysis
Test for Equality of Means Between Series
 Unemployment
rates between
those with a
degree and
those without
differ
significantly
Date: 11/25/10 Time: 21:06
Sample: 1 10
Included observations: 10
Method
t-test
Satterthwaite-Welch t-test*
Anova F-test
Value
-5.630431
-5.630431
31.70175
Prob
0.000
0.001
0.000
Welch F-test*
(1, 12.4844)
31.70175
*Test allows for unequal cell variances
Analysis of Variance
Source of Variation
df Sum of Sq.
0.001
Between
Within
Total
Category Statistics
Variable
DEGREE_UNEMP
NO_DEGREE_UNEMP
All
df
18
12.48443
(1, 18)
Mean Sq.
1 32126055 32126055
18 18240917 1013384
19 50366972 2650893
Count Mean
10 1547.6
10 4082.4
20
2815
Std. Dev.
582.9332
1298.829
1628.156
Std. Err. Of
Mean
184.3397
410.7259
364.0668
Team #4
Exploratory Data Analysis
 There is no
significant
relationship (as
seen by the t-stats)
between having a
degree and being
unemployed or
having no degree
and being
unemployed
 Intuitively this
seems very wrong
and can be
accounted for by
the constant.
 In the next slide the
constant will be
removed
Dependent Variable: UNEMP_RATE
Method: Least Squares
Date: 11/25/10 Time: 21:18
Sample: 1 10
Included observations: 10
Variable
Coefficient Std. Error
C
1.394668
0.4133
DEGREE_UNEMP
0.001512 0.00135
NO_DEGREE_UNEMP 0.000442
0.0006
t-Statistic Prob.
3.37449 0.0118
1.12447 0.2979
0.73203 0.4879
R-squared
0.991372
Mean dependent var
5.538
Adjusted R-squared
0.988907
S.D. dependent var
1.461
S.E. of regression
Sum squared resid
0.15385
0.165688
Akaike info criterion
Schwarz criterion
-0.662
-0.57
Log likelihood
6.311784
Hannan-Quinn criter.
-0.762
F-statistic
Prob(F-statistic)
402.1441
0
Durbin-Watson stat
0.437
Team #4
Exploratory Data Analysis
 With the Constant
removed both
variables become
significant
 Small coefficients
imply a very small
effect on the
unemployment
rate
Dependent Variable: UNEMP_RATE
Method: Least Squares
Date: 11/25/10 Time: 21:19
Sample: 1 10
Included observations: 10
Variable
Coefficient Std. Error
t-Statistic Prob.
DEGREE_UNEMP
-0.002632 0.00083
-3.169111 0.0132
0.00235 0.00032
7.341046 0.0001
NO_DEGREE_UNEMP
R-squared
0.977336
Mean dependent var
5.538
Adjusted R-squared
0.974503
S.D. dependent var
1.4607
S.E. of regression
0.233243
Akaike info criterion
0.1034
Sum squared resid
0.43522
Schwarz criterion
0.1639
Log likelihood
1.483058
Durbin-Watson stat
0.492591
Hannan-Quinn criter.
0.037
Team #4
Exploratory Data Analysis
 Annual Income is
not significant
when regressed
with a constant
Dependent Variable: AN_INC_PER_CAP
 Low t-stat and R2
Sample: 1 10
Method: Least Squares
Date: 11/25/10 Time: 21:24
Included observations: 10
Variable
Coefficient Std. Error
t-Statistic
Prob.
C
28599.63 5233.213
5.465023
0.0006
1099.2 916.7016
1.199081
0.2648
UNEMP_RATE
R-squared
0.152344
Mean dependent var
Adjusted R-squared
0.046388
S.D. dependent var
4113.64
S.E. of regression
4017.095
Akaike info criterion
19.6114
Sum squared resid
1.29E+08
Schwarz criterion
19.6719
Log likelihood
-96.05681
Hannan-Quinn criter.
F-statistic
1.437796
Prob(F-statistic)
0.264805
Durbin-Watson stat
34687
19.545
0.41066
Team #4
Exploratory Data Analysis
 This regresses
the
Unemployment
rate vs the Crime
rate
 We found that the
unemployment
rate is not a
significant factor
in the crime rate
as seen by the
low f-stat and the
low t-stat
Dependent Variable: CRIMERATE
Method: Least Squares
Date: 11/25/10 Time: 21:26
Sample: 1 10
Included observations: 10
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
125.2415
16.1442
7.75768
0.0001
UNEMP_RATE
1.131003
2.827978
0.399933
0.6997
0.019601
Mean dependent var
131.505
-0.102948
S.D. dependent var
11.8
S.E. of regression
12.39253
Akaike info criterion
8.04892
Sum squared resid
1228.599
Schwarz criterion
8.10944
Hannan-Quinn criter.
7.98254
Durbin-Watson stat
0.45088
R-squared
Adjusted R-squared
Log likelihood
-38.24461
F-statistic
0.159947
Prob(F-statistic)
0.699672
Team #4
Exploratory Data Analysis
 This regression
has the
Unemployment
Rate vs Suicide
Rate
 We found that
there is a slight
relationship
between the two
 The f-stat is low,
but the R2
indicates that
there is some
relationship
between the
variables
Dependent Variable: SUICIDE_RATE
Method: Least Squares
Date: 11/25/10 Time: 21:31
Sample: 1 10
Included observations: 10
Variable
Coefficient
Std. Error
t-Statistic
C
10.31478
0.368486
27.9923
0
0.1268
0.064548
1.964442
0.0851
UNEMP_RATE
Prob.
R-squared
0.325409
Mean dependent var
Adjusted R-squared
0.241085
S.D. dependent var
0.32469
S.E. of regression
0.282856
Akaike info criterion
0.4891
Sum squared resid
0.640059
Schwarz criterion
0.54961
Hannan-Quinn criter.
0.42271
Durbin-Watson stat
0.58848
Log likelihood
-0.445485
F-statistic
3.859031
Prob(F-statistic)
0.085072
11.017
Team #4
Exploratory Data Analysis
 Welfare regressed
against
unemployment
shows a
significant
relationship
between the two
 Intuitively, as the
number of
unemployed
people grows, the
greater demand
for welfare
Dependent Variable: WELFARE_BUDGET
Method: Least Squares
Date: 11/25/10 Time: 21:34
Sample: 1 10
Included observations: 10
Variable
Coefficient Std. Error
t-Statistic
Prob.
C
1131949 327896.7
3.45215
0.0087
UNEMP_RATE
159511.5 57437.65
2.777124
0.024
R-squared
0.490849
Mean dependent var 2015323
Adjusted R-squared
0.427205
S.D. dependent var
332568
S.E. of regression
251698.6
Akaike info criterion
27.8867
Sum squared resid
5.07E+11
Schwarz criterion
27.9472
Log likelihood
-137.4335
Hannan-Quinn criter.
27.8203
Durbin-Watson stat
0.35586
F-statistic
7.712418
Prob(F-statistic)
0.024031
Team #4
Exploratory Data Analysis
 Here the
Unemployment
Rate is regressed
against multiple
variables
 All variables are
significantly
contribute to the
Unemployment
Rate
 Annual Inc per
cap coefficient is
negative,
suggesting a
higher income
implies a lower
unemployment
rate
 Surprisingly, as
crime rate
increases
unemployment
decreases
Dependent Variable: UNEMP_RATE
Method: Least Squares
Date: 11/28/10 Time: 12:20
Sample: 1 10
Included observations: 10
Variable
Coefficient
Std. Error t-Statistic
Prob.
AN_INC_PER_CAP
-0.000411
0.000113 -3.64743
0.0148
CRIMERATE
-0.083554
0.02457 -3.40071
0.0192
SUICIDE_RATE
4.728742
1.383211 3.418669
0.0189
WELFARE_BUDGET
5.61E-06
1.13E-06 4.979503
0.0042
C
-32.63094
11.73778 -2.77999
0.0389
R-squared
0.948687
Mean dependent var
Adjusted R-squared
0.907637
S.D. dependent var
1.46071
S.E. of regression
0.443928
Akaike info criterion
1.52054
Sum squared resid
0.98536
Schwarz criterion
1.67184
F-statistic
23.1103
Prob(F-statistic)
0.00201
Log likelihood
Durbin-Watson stat
-2.602719
2.027352
5.538
Team #4
Statistical Analysis
+
What does it effect?
Welfare
Suicide
Unemployment
Income
–
Constant
Crime
Team #4
Statistical Analysis
Unemployment
Significant Regressions
Education
Sex
Ethnicity
Team #4
Conclusion
Recap:













Regressing unemployment rate with these a few durations has no meanings.
Unemployment rates between Men and Women have no significant difference
We can compare different sample means:
Unemployment rates between Men and Women have no significant
difference:
Unemployment rates between Degree and No Degree have significant
difference:
Regress unemployment rate with men and women unemp (with c and without
c):
Regress unemployment rate with degree and no degree unemp (with c and
without c):
Regress annual income with unemployment rate (not significant, no
relationship):
Regress crime rate with unemployment rate (not significant, no relationship):
Regress suicide rate with unemployment rate (not significant, some
relationship):
Regress welfare budget with unemployment rate (significant, strong
relationship):
Regressing unemployment rate with these four variables has no meanings.
Regress Unemployment with Annual Income, Crime rate, Suicide rate,
Welfare budget(Significant)
Team #4
Conclusions
 I have no money and cannot
get any work
 Father, can’t I have a piece of
bread
 I say father, could you get
some specie claws?
 I’m so hungry
 My dear, cannot you continue
to get some food for the
children I don’t care for myself
 I say Sam, I wonder where we
are to get our Costs
 **Warrant Distraint for rent**
Team #4
Future Investigations
 Next time, I top down
approach how does state
and county unemployment
break down.
Team #4
Future Investigations
 Or a bottom up
approach that
considers the
dynamic
between US
unemployment
and international
unemployment.
Team #4
LOGO
Team #4
Technical Appendix
Country
Rates:
United States
Year
Interest
0.25%
Jan
Growth
2.00%
Feb
Inflation
Jobless
Exchange
Current
Account
1.20%
9.60%
82.92
-123
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2010
9.7
9.7
9.7
9.9
9.7
9.5
9.5
9.6
9.6
9.6
2009
7.7
8.2
8.6
8.9
9.4
9.5
9.4
9.7
9.8
10.1
10
10
2008
5
4.8
5.1
5
5.4
5.5
5.8
6.1
6.2
6.6
6.9
7.4
Team #4
Works Cited
 http://www.bls.gov/cps/
 http://en.wikipedia.org/wiki/Une
mployment
 http:://en.wikipedia.org/wiki/Fil
e:Panic1873.jpg
 http://upload.wikimedia.org/wik
ipedia/commons/c/ce/Chomageoecd-t3-2009.png
Team #4