A statistical study carried out by researchers from the University of Granada (UGR) and the Complutense University of Madrid predicts a recovery of the Spanish labour market and a decrease in unemployment, except in agriculture, despite the general economic trend and the chaos caused by COVID-19
A statistical study carried out by researchers from the University of Granada (UGR) and the Complutense University of Madrid predicts a recovery of the Spanish labour market and a decrease in unemployment, except in agriculture, despite the general economic trend and the chaos caused by COVID-19.
José Aureliano Martín, a researcher and lecturer in Economics and Business at the University of Granada, and César Pérez, a lecturer at Complutense and Head of the Statistical Unit of Spain’s Institute of Fiscal Studies, are conducting on-going research to forecast the trajectory of unemployment during the pandemic.
Martín explains that the initial phase of the study was carried out during the first wave of COVID-19, when the need was identified to source the most accurate statistical system to make forecasts about the impact of the pandemic on employment. Such a system needed to have the capacity to differentiate between economic trends and the influence of the virus.
“We opted for the ARIMA model, with an intervention function, which can offer significant stability because it makes predictions based on the historical evolution of a single variable while taking into account the extraordinary and unknown phenomena that can occur at any moment in time,” explains Martín, a member of the UGR’s Innovation, Sustainability, and Business Development Research Group (ISDE).
The researcher defends this choice of statistical model, explaining that it is quite distinct from classical approaches, which would be bound to fail as there are no parallels with which to compare. “There has never been a pandemic like this one—not even in the crisis of ’29,” he observes.
In the first phase of the study, this predictive model dealing with the impact of the pandemic on the labour market successfully outlined a scenario in which agriculture and the primary sector acted as ‘protective dykes’ against the unemployment figures. When generating the forecasts, the two researchers incorporated February (pre-COVID) data into the historical employment data, to differentiate between the trend that the economy would have followed without the pandemic and the effect of the coronavirus.
“When we added the data differentiated by sector, the forecasts proved correct, albeit always with a slight margin of error,” says Martín. Having now incorporated the unemployment figures for October 2020 into this system, Martín maintains that the labour market is showing stability, confidence, and an upward trend toward recovery: “There are already some predictions that the economy is beginning to show signs of recovery, despite the gravity of the situation.” Martín insists that the data from Spain’s Public Employment Service (SEPE) for October indicate that “employment is sustaining its recovery despite the pandemic.”
According to the model, based on national data, in the coming months, the country will see a general trend toward a “sustained decrease in unemployment” in almost all sectors, except for agriculture—and that will be the case even in the service sector, despite restrictions and closures in some parts of Spain.
Media enquiries:
José Aureliano Martín Segura
Department of Business Organisation II
Faculty of Economics and Business, University of Granada
Tel.: +34 956 526157Email: aurelianomartin@ugr.es
