Statistical profiling of long-term unemployment

The risk of long-term unemployment can be predicted already at the beginning of an unemployment spell. The likelihood of prolonged unemployment can be assessed using statistical profiling. The profiling model was developed by researchers Jutta Moisala (now Viinikainen), Ilpo Suoniemi, and Roope Uusitalo in a study conducted for the Ministry of Labour titled Statistical Profiling of the Unemployed. The model helps, for example, employment counselors assess who needs special support in their job search. In the best case, prolonged unemployment can be prevented if those in the risk group receive appropriate guidance in time. Prolonged unemployment causes problems not only for the unemployed individual but also for public finances and the functioning of the labour market.

In the model developed by Moisala, Suoniemi, and Uusitalo, the risk of prolonged unemployment is assessed using multiple background variables. These include age, gender, nationality, level of education, field of education, possible disability, and an index describing regional labour market differences. Factors related to unemployment are also essential. These include pre-unemployment activity, the reason for the termination of the previous employment relationship, the number of unemployment days during the previous three years, and the number of unemployment spells during the previous year. In addition, the labour policy statement issued to the unemployed person is taken into account.

Based on this background information, a risk score predicting the duration of the unemployment spell is calculated for each unemployed individual. Based on this score, the unemployed are divided into five groups. In group one, the risk of prolonged unemployment is the lowest, and in group five, the highest.

To develop the profiling model, the researchers drew a sample from the Ministry of Labour’s job brokerage register of individuals who became unemployed in 1998. The model’s predictions of unemployment duration were compared with actual outcomes obtained from the register in 2001. The comparison between predictions and realized outcomes showed that the profiling model can predict the duration of unemployment fairly well. In group one, where the risk of prolonged unemployment is the lowest, the unemployment spell lasted on average 25 days. In the highest-risk group, unemployment lasted on average 336 days. (AI translation)

Publication Information

Suoniemi, I., Moisala, J. & Uusitalo, R. (2006), Työttömien tilastollinen profilointi, Työministeriö, Työpoliittinen tutkimus 316.

• ISSN: 1236-7176
• ISBN: 952-490-019-X
• Press Release in Finnish