Labor Supply and Unemployment in the Regional Forecast

Introduction

ETLA Economic Research, Labour Institute for Economic Research, and Pellervo economic research have collaboratively initiated a pilot project for drafting regional economic forecasts. The forecasting project assesses the development of production, labor demand and supply, as well as internal migration within the country at the regional level for the years 1998–2002. Additionally, the project involves the development of regional forecasting methods necessary for the creation of these forecasts.

The report examines the econometric methods used in predicting labor supply and unemployment rates, as well as the results obtained. The report is divided into four parts. The first section addresses the data issues in regional labor markets. The second section describes the regional development of labor markets in the 1990s, primarily through the lens of unemployment and participation rates. This analysis provides a foundation for regional labor market forecasting. The third section looks at the forecasting of labor supply and unemployment rates from the perspective of econometric methods and forecast results, justifying the choices made in the forecasting work. In predicting labor supply and unemployment, the project uses regional activity and employment forecasts produced by the Research Institute of the Finnish Economy, along with net migration and population forecasts produced by the Pellervo Economic Research Institute. The forecasting of labor supply and unemployment rates is based on an age-group approach. The report concludes with several suggestions for future research topics and the development of the forecasting methods used.

• ISSN: 1236-7184
• ISBN: 652-5071-31-6
• Publication in PDF-format