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Can Google Data Help Predict French Youth Unemployment?

Author

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  • Frédéric Karamé

    (EPEE (Université d’Evry-Val-d’Essonne), TEPP (FR CNRS n°3126), DYNARE Team (Cepremap) and Centre d’Etudes de l‘Emploi)

  • Yannick Fondeur

    (Centre d’Etudes de l’Emploi)

Abstract

According to the rising “Google econometrics” literature, Google queries may help predict economic activity. The aim of our paper is to test if these data can enhance predictions for youth unemployment in France. As we have on the one hand weekly series on web search queries and on the other hand monthly series on unemployment for the 15 to 24-year-olds, we use the unobserved components approach in order to exploit all available information. Our model is estimated with a modified version of the Kalman filter taking into account the twofold issues of non-stationarity and multiple frequencies in our data. We find that including Google data improves unemployment predictions relatively to a competing model without search data queries.

Suggested Citation

  • Frédéric Karamé & Yannick Fondeur, 2012. "Can Google Data Help Predict French Youth Unemployment?," Documents de recherche 12-03, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    • Handle: RePEc:eve:wpaper:12-03
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    More about this item

    Keywords

    Google econometrics; forecasting; nowcasting; unemployment; unobserved components; diffuse initialization; Kalman filter; univariate treatment of time series; smoothing; multivariate models;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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