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Predicting re-employment: machine learning versus assessments by unemployed workers and by their caseworkers

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van den Berg, Gerard J. ; Kunaschk, Max ; Lang, Julia ; Stephan, Gesine ; Uhlendorff, Arne

Institute of Labor Economics, Bonn

IZA - Bonn

2023

57 p.

unemployment ; unemployment benefit ; labour market policy

Germany

Discussion Paper

16426

Unemployment

https://docs.iza.org/dp16426.pdf

English

Bibliogr.

"Predictions of whether newly unemployed individuals will become long-term unemployed are important for the planning and policy mix of unemployment insurance agencies. We analyze unique data on three sources of information on the probability of re-employment within 6 months (RE6), for the same individuals sampled from the inflow into unemployment. First, they were asked for their perceived probability of RE6. Second, their caseworkers revealed whether they expected RE6. Third, random-forest machine learning methods are trained on administrative data on the full inflow, to predict individual RE6. We compare the predictive performance of these measures and consider whether combinations improve this performance. We show that self-reported and caseworker assessments sometimes contain information not captured by the machine learning algorithm."

Digital



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