A Neural Network Based Forecasting Method For the Unemployment Rate Prediction Using the Search Engine Query Data

Abstract

Unemployment rate prediction has become critically important, because it can help government to make decision and design policies. In recent years, forecast of unemployment rate attracts much attention from governments, organizations, and research institutes, and researchers. Recently, a novel method using search engine query data to forecast unemployment was proposed by scholars. In this paper, a data mining based framework using web information is introduced for unemployment rate prediction. Under the framework, a neural network method, as one of the most effective data mining tools, is developed to forecast unemployment trend using search engine query data. In the proposed method, search engine query data related with employment activities is firstly found. Secondly, feature selection models including correlation coefficient method and genetic algorithm are constructed to reduce the dimension of the query data. Thirdly, various neural networks are employed to model the relationship between unemployment rate data and query data. Fourthly, an optimal neural network is selected as the selective predictor by using the cross-validation method. Finally, the selective neural network predictor with the best feature subset is used to forecast unemployment trend. The empirical results show that the proposed method clearly outperforms the classical forecasting approaches for the unemployment rate prediction. These findings imply that data mining method, such as neural networks, together with web information, can be used as an alternative tool to forecast social/economic hotspot.