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Forecasting Regional Employment with the ENTROP Method

Listed author(s):
  • Uwe Blien
  • Alexandros Tassinopoulos

The paper provides an outline of a method useful for forecasting problems. The approach is based on a combination of top-down and bottom-up techniques. It is applied to project employment in all 327 (western) German districts for a time span of two years. The most important step in the preparation of the forecast uses the ENTROP method, which is an entropy optimizing procedure, a generalization of common RAS techniques, newly developed for the estimation of matrices from heterogeneous information. In a defined sense the estimated matrix is the most probable one. The method chosen is very flexible and uses any available information extensively. Therefore, the estimates are reliable as is shown in an ex-post forecast. There is a double purpose for the forecast of employment. First, it helps to gain insights in the causal processes generating regional developments and spatial disparities on labour markets. Second, it is useful for regional labour market policies, e.g. the budgetary planning of the Federal Employment Services. Cet article cherche a esquisser une methode qui repond aux problemes de la prevision. La methode est fondee sur une combinaison des techniques descendantes et ascendantes. On s'en sert afin de prevoir sur une periode de deux annees l'emploi dans chacun des 327 districts a l'ouest de l'Allemagne. Le stade preliminaire le plus important utilise la methode ENTROP, une methode qui optimise l'entropie, une generalisation des techniques RAS courantes, nouvellement developpees pour estimer les matrices de l'information heterogene. Du point de vue de sa definition, la matrice estimee s'averera la plus probable. La methode choisie est tres flexible et emploie beaucoup toute information disponible. Ainsi, les estimations sont sures, dont fait preuve une prevision ex post. La raison d'etre de la prevision de l'emploi est double. En premier, on arrive a mieux connaitre les causes du developpement regional et des ecarts regionaux du marche du travail. En deuxieme, elle guide les politiques regionales en faveur de l'emploi, a savoir la planification budgetaire des agences pour l'emploi federales. Dieser Aufsatz liefert den Umriss einer nutzlichen Methode zur Erstellung von Prognosen. Der Ansatz stutzt sich auf eine Kombination von topdown und bottom-up Techniken. Er wird dazu benutzt, die sozialversicherungspflichtige Beschaftigung in allen 327 (West) deutschen Landkreisen fur die Zeitspanne von 2 Jahren zu projizieren. Der wichtigste Schritt bei der Vorbereitung der Prognose stutzt sich auf die ENTROP Methode, ein Verfahren zur Optimierung der Entropie. Dabei handelt es sich um eine Verallgemeinerung gewohnlicher RAS Techniken, eine Neuentwicklung zur Schatzung von Matrizen aus heterogenen Daten. In gewisser Hinsicht ist die geschatzte Matrix die wahtscheinlichste von allen zulassigen. Die gewahlte Methode ist sehr flexibel und macht ausgiebig Gebrauch von allen verfugbaren Daten. Die Schatzungen sind darum zuverlassig, wie an einer ex-post Prognose gezeigt wird. Die Prognose der Beschaftigung verfolgt zwei Zwecke: erstens tragt sie dazu bei, Einsichten in die Kausalvorgange zu gewinnen, welche regionalen Entwicklungen und raumliche Disparitaten in Arbeitsmarkten zu Grunde liegen. Zweitens ist sie nutzlich fur die Planung der regionalen Arbeitsmarktpolitik, z. B. fur die Haushaltsplanung der Bundesanstalt fur Arbeit.

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Article provided by Taylor & Francis Journals in its journal Regional Studies.

Volume (Year): 35 (2001)
Issue (Month): 2 ()
Pages: 113-124

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Handle: RePEc:taf:regstd:v:35:y:2001:i:2:p:113-124
DOI: 10.1080/00343400120033106
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  1. Holden, Darryl R & Nairn, Alasdair G M & Swales, J K, 1989. "Shift-Share Analysis of Regional Growth and Policy: A Critique," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 51(1), pages 15-34, February.
  2. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, January.
  3. Nijkamp, Peter, 1975. "Reflections on gravity and entropy models," Regional Science and Urban Economics, Elsevier, vol. 5(2), pages 203-225, May.
  4. G. M. Hyman, 1969. "The Calibration of Trip Distribution Models," Environment and Planning A, , vol. 1(1), pages 105-112, June.
  5. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
  6. P B Slater, 1992. "Equilibrium and nonequilibrium statistical thermodynamical approaches to modeling spatial interaction dynamics," Environment and Planning A, Pion Ltd, London, vol. 24(3), pages 441-446, March.
  7. Zellner, A., 1988. "Optimal Information-Processing And Bayes' Theorem," Papers m8803, Southern California - Department of Economics.
  8. Oberhofer, Walter & Blien, Uwe & Tassinopoulos, Alexandros, 2000. "Forecasting Regional Employment With A Generalised Extrapolation Method," ERSA conference papers ersa00p170, European Regional Science Association.
  9. M B Gonçalves & I UIysséa-Neto, 1993. "The development of a new gravity - opportunity model for trip distribution," Environment and Planning A, Pion Ltd, London, vol. 25(6), pages 817-826, June.
  10. G M Hyman, 1969. "The calibration of trip distribution models," Environment and Planning A, Pion Ltd, London, vol. 1(1), pages 105-112, January.
  11. Paul Krugman, 1998. "Space: The Final Frontier," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 161-174, Spring.
  12. Lutz Bellmann & Uwe Blien, 2001. "Wage Curve Analyses of Establishment Data from Western Germany," ILR Review, Cornell University, ILR School, vol. 54(4), pages 851-863, July.
  13. Eileen Appelbaum & Ronald Schettkat, 1994. "The end of full employment? On economic development in industrialized countries," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 29(3), pages 122-130, May.
  14. Baltagi, Badi H. & Blien, Uwe, 1998. "The German wage curve: evidence from the IAB employment sample," Economics Letters, Elsevier, vol. 61(2), pages 135-142, November.
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