Predictors of unemployment (using the GSS data) : need help.

Economics Economics Questions
1

Using the GSS data, I try to investigate which factor is the most determinant of the risk of being unemployed, as reported by GSS respondents. For this purpose, I use the logistic regression. The variables used are listed below. (for those who want to know how to use the GSS, see here)

UNEMP – At any time during the last ten years, have you been unemployed and looking for work for as long as a month? (0 = YES; 1 = NO)

SEX – 1 = MALE, 2 = FEMALE.
RACE – 1 = white 2 = black 3 = other.
DEGREE – 0 = Less than high school, 1 = High school, 2 = Junior College, 3 = Bachelor, 4 = Graduate.
POLVIEWS – 1 = Extremely liberal, 4 = Moderate, 7 = Extremely conservative.
WORDSUM – a 10-question vocabulary test, and a proxy for QI, correlation = 0.71; 0.83 for “g” (i.e. general intelligence factor).

Valid cases – 13,421

It should be noted that while all the coefficients are statistically significant, the pseudo R-squared, which expresses the proportion of variance in the dependent variable explained by the entire set of independent variables, shows a very low value.

Keep in mind that an independent variable with a low point-scale (say, 2) is expected to have a higher coefficient than an independent variable with a high point-scale (say, 10). In fact, a change in one unit of an independent variable with a high point-scale would have a very little effect, especially when the independent variable can take on many values (for instance, years, age, or income), on the dependent variable.

DEGREE and WORDSUM have positive Bs, which means that intelligence and degree level are negatively (and independently) associated with the risk of being unemployed.
RACE has a negative B, which means that being black (or other), regardless of degree level and intelligence, is significantly associated with the risk of being unemployed. One may be tempted to jump to the conclusion that discrimination and racism account for the racial differences in unemployment rates, but evidence shows that the hypothesis is false. In contrast, the minimum wage is the best explanation of this racial disparity.

A curiosity is the fact that POLVIEWS is strongly associated with the risk of being unemployed. Why are liberals more likely than conservatives to be unemployed ? And why POLVIEWS is more determinant than DEGREE and WORDSUM in the likelihood of being unemployed ?

Then, I re-ran a logit regression, including “SEX” in lieu and place of ” RACE” and by limiting the sample to whites.

Valid cases – 11,342

As can be seen, the coefficients are statistically significant, although WORDSUM is statistically significant only if we accept a 10 percent level of significance (p-value < 0.10). Being a male is strongly associated with the risk of being unemployed.

Finally, I investigate whether POLVIEWS affects the risk of being unemployed by including the variable “AGE” since unemployment rate for young people is usually high, thanks to minimum wage laws, and because young people are also more likely than old people to be a liberal. To control for this potential confounding factor, I include “AGE” and “COHORT” in the regression. Because the two variables have a high point-scale, I recoded them as follows :

COHORT (r:1883-1910;1911-1930;1931-1950;1951-1970;1971-1992). 5 point-scale. Birth cohort of respondent.
AGE (r:18-25;26-33;34-41;42-49;50-57;58-65;66-73;74-81;82-99). 9 point-scale. Respondent’s age.

Valid cases – 13,407

We can see that AGE has a positive B, which means that unemployment decreases with age, consistent with the finding that young people are less productive, and have fewer skills than older people. The negative sign of the coefficient for COHORT underlines an increasing rate of unemployment over the years under study. But more strikingly is the fact that, even when AGE and COHORT have been controlled for, being a liberal still remains associated with the risk of being unemployed, for some obscure reasons. It is also worth noting that being a black (or other) is still associated with the risk of being unemployed. Another factor beyond age and intelligence/degree must account for the racial difference in unemployment rate. Again, minimum wage is a good candidate.

I don’t really understand why being a male and a liberal are so strongly associated with the risk of being unemployed. For those who are interested, you can check the data yourself (here’s the GSS website). Enter UNEMP in the row, and SEX, POLVIEWS, or COHORT in column, and RACE(1) in filter (unless you have already inserted RACE in column). You will find the same results.

2

  1. I assume you are using the modern “socialist / social democrat” definition of liberal, as opposed to its original meaning (i.e., free market economist)?

  2. Well, being male and a socialist => selecting a profession which is useless or pseudo-science (e.g., sociologist with PHd dissertaion titled “some thoughts about the culture of country music vs. death metal,” as Robert Heinlein had once joked) => not employed.

Other mostly useless professions are philosophy (as it is taught today), linguistics (as it is taught in most places), sociology, english literature, ____ literature, cultural anthropology, etc.**

Conservatives more often chose materials / mechanical / electrical engineer or computer science as their profession and get employed more easily.

** macro-economics goes in that list, too.

  1. Also, I’m not seeing any interaction terms in your regression? Logically, AGE, and SEX would be expected to vary in effect when taken together with POLVIEW and RACE.

  2. My explanation may be true, but I don’t recommend saying it to your professor. He or she may be liberal and have liberal children who are idiots unemployed precisely because they majored or got a PHd in things which have no market value based on their nonsensical political views.

3

Why are liberals more likely than conservatives to be unemployed ?

Maybe the question you should be asking is “why are the unemployed more likely to adopt ‘liberal’ beliefs?”

4

Because liberals ask the government to take money from others to give to them in the name of the war on poverty (republicans also are guilty of this, but mostly liberal fault).

5

Consumariat wrote the following post at Wed, Aug 15 2012 8:07 PM:

Why are liberals more likely than conservatives to be unemployed ? Maybe the question you should be asking is “why are the unemployed more likely to adopt ‘liberal’ beliefs?”

Good point. Seconded.

6

Is consumariat trolling us or did he become conservative?