A Condition of our times

1
A Condition of our times An Analysis of
Unemployment rates Group 5

• Adam Sutton
• Chia-Jung Liu
• Grant Volk
• Yin Chu
• Can Shen
• Robert Matarazzo
• Andrew Ratcliffe
• Ruben Bos

2
Importance of Unemployment

• Highest since Great Depression
• Effects well being of population
• Effects well being of economy
• Implicit effects on policy development and
  reformation

3
Main Function of this analysis

• To understand the correlation, if any, between
  unemployment rates and population characteristics

4
Explanatory Variables

• State Expenditures
• Percentage of population that is White,
  African-American, and Hispanic
• Percentage of population with no health insurance
• Percentage of temporary jobs
• Percentage population over 25 with a bachelors
  degree
• Income per capita
• Homeless per 1000
• Number of citizens participating in the food
  stamps program
• Crimes per 100,000 citizens
• Percentage of blue collar jobs
• Data taken across 51 observations including 50
  states and the District of Columbia

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Correlation Between Independent Variables
Variable (1) Variable (2) R-squared F-Statistics PROB
Percent bachelors Income per capita 0.694573 0.000000
Percent blue collar Percent bachelors 0.747881 0.000000
Blue collar Income per capita 0.489143 0.000000
Food stamps Crime per 100,000 0.047541 0.124279
Food stamps State expenditures 0.771099 0.000000
Percent without health care Percent white 0.207299 0.000788
Percent without health care Percent black 0.043089 0.143844
Percent without health care Percent Hispanic 0.333601 0.000009
Crime per 100,000 per state Percent white 0.387852 0.000001
Crime per 100,000 per state Percent black 0.448505 0.000000
Crime per 100,000 per state Percent Hispanic 0.078482 0.046468
Percent without health care Crime rate per 100,000 people 0.111541 0.016613
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Results

• Correlations between two signs of wealth
• Bachelors degree and income per capita
• Correlations between two signs of poverty
• Lack of health care and food stamp participants
• Lack of significant negative correlations between
  a sign of wealth and a sign of poverty

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Individual Regression Results
Dependent Variable Explanatory Variable R-squared F-Statistics PROB
Unemployment Rate Percent of jobs that are blue-collar 0.040628 0.156083
Unemployment Rate Crime per 100,000 per state 0.200999 0.000969
Unemployment Rate Participation in food stamps program 0.185520 0.001604
Unemployment Rate Homeless per 1000 per state 0.146512 0.005568
Unemployment Rate Income per capita 0.007179 0.554416
Unemployment Rate Percent of adults with bachelors 0.004037 0.657805
Unemployment Rate Percent of African Americans per state 0.144186 0.005991
Unemployment Rate Percent of Hispanics per state 0.034391 0.192619
Unemployment Rate Percent of whites per state 0.094708 0.028029
Unemployment Rate Percent of pop with no health care 0.025767 0.260486
Unemployment Rate Percent of jobs that are temp 0.005882 0.592693
Unemployment Rate State expenditures 0.147193 0.005953
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Non-significant explanatory variables

• Percentage of population that is White and
  Hispanic
• Percentage of population with no health insurance
• Percentage of temporary jobs
• Percentage population over 25 with a bachelors
  degree
• Income per capita
• Percentage of blue collar jobs

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Individual Regression Results
Dependent Variable Explanatory Variable R-squared F-Statistics PROB
Unemployment Rate Percent of jobs that are blue-collar 0.040628 0.156083
Unemployment Rate Crime per 100,000 per state 0.200999 0.000969
Unemployment Rate Participation in food stamps program 0.185520 0.001604
Unemployment Rate Homeless per 1000 per state 0.146512 0.005568
Unemployment Rate Income per capita 0.007179 0.554416
Unemployment Rate Percent of adults with bachelors 0.004037 0.657805
Unemployment Rate Percent of African Americans per state 0.144186 0.005991
Unemployment Rate Percent of Hispanics per state 0.034391 0.192619
Unemployment Rate Percent of whites per state 0.094708 0.028029
Unemployment Rate Percent of pop with no health care 0.025767 0.260486
Unemployment Rate Percent of jobs that are temp 0.005882 0.592693
Unemployment Rate State expenditures 0.147193 0.005953
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Individual Regression Results
Dependent Variable Explanatory Variable R-squared F-Statistics PROB
Unemployment Rate Percent of jobs that are blue-collar 0.040628 0.156083
Unemployment Rate Crime per 100,000 per state 0.200999 0.000969
Unemployment Rate Participation in food stamps program 0.185520 0.001604
Unemployment Rate Homeless per 1000 per state 0.146512 0.005568
Unemployment Rate Income per capita 0.007179 0.554416
Unemployment Rate Percent of adults with bachelors 0.004037 0.657805
Unemployment Rate Percent of African Americans per state 0.144186 0.005991
Unemployment Rate Percent of Hispanics per state 0.034391 0.192619
Unemployment Rate Percent of whites per state 0.094708 0.028029
Unemployment Rate Percent of pop with no health care 0.025767 0.260486
Unemployment Rate Percent of jobs that are temp 0.005882 0.592693
Unemployment Rate State expenditures 0.147193 0.005953
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Individual Regression Results
Dependent Variable Explanatory Variable R-squared F-Statistics PROB
Unemployment Rate Percent of jobs that are blue-collar 0.040628 0.156083
Unemployment Rate Crime per 100,000 per state 0.200999 0.000969
Unemployment Rate Participation in food stamps program 0.185520 0.001604
Unemployment Rate Homeless per 1000 per state 0.146512 0.005568
Unemployment Rate Income per capita 0.007179 0.554416
Unemployment Rate Percent of adults with bachelors 0.004037 0.657805
Unemployment Rate Percent of African Americans per state 0.144186 0.005991
Unemployment Rate Percent of Hispanics per state 0.034391 0.192619
Unemployment Rate Percent of whites per state 0.094708 0.028029
Unemployment Rate Percent of pop with no health care 0.025767 0.260486
Unemployment Rate Percent of jobs that are temp 0.005882 0.592693
Unemployment Rate State expenditures 0.147193 0.005953
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Individual Regression Results
Dependent Variable Explanatory Variable R-squared F-Statistics PROB
Unemployment Rate Percent of jobs that are blue-collar 0.040628 0.156083
Unemployment Rate Crime per 100,000 per state 0.200999 0.000969
Unemployment Rate Participation in food stamps program 0.185520 0.001604
Unemployment Rate Homeless per 1000 per state 0.146512 0.005568
Unemployment Rate Income per capita 0.007179 0.554416
Unemployment Rate Percent of adults with bachelors 0.004037 0.657805
Unemployment Rate Percent of African Americans per state 0.144186 0.005991
Unemployment Rate Percent of Hispanics per state 0.034391 0.192619
Unemployment Rate Percent of whites per state 0.094708 0.028029
Unemployment Rate Percent of pop with no health care 0.025767 0.260486
Unemployment Rate Percent of jobs that are temp 0.005882 0.592693
Unemployment Rate State expenditures 0.147193 0.005953
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Individual Regression Results
Dependent Variable Explanatory Variable R-squared F-Statistics PROB
Unemployment Rate Percent of jobs that are blue-collar 0.040628 0.156083
Unemployment Rate Crime per 100,000 per state 0.200999 0.000969
Unemployment Rate Participation in food stamps program 0.185520 0.001604
Unemployment Rate Homeless per 1000 per state 0.146512 0.005568
Unemployment Rate Income per capita 0.007179 0.554416
Unemployment Rate Percent of adults with bachelors 0.004037 0.657805
Unemployment Rate Percent of African Americans per state 0.144186 0.005991
Unemployment Rate Percent of Hispanics per state 0.034391 0.192619
Unemployment Rate Percent of whites per state 0.094708 0.028029
Unemployment Rate Percent of pop with no health care 0.025767 0.260486
Unemployment Rate Percent of jobs that are temp 0.005882 0.592693
Unemployment Rate State expenditures 0.147193 0.005953
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Significant explanatory variables

• State Expenditures
• Percentage of population that is African-American
• Homeless per 1000
• Number of citizens participating in the food
  stamps program
• Crimes per 100,000 citizens

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Multi-variable regressions

• State expenditures and food stamp participation
• In order to study the variables related to state
  spending against unemployment
• Determined that food stamp participation is the
  most significant variable while state
  expenditures is not

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• Normal residuals
• No heteroskedasticity

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Multi-variable regressions

• Crime rate and income per capita
• In order to study the effects of poverty and
  unemployment
• Highly significant regression did exist
• Crime rate is highly significant while income is
  not
• Introduction of dummy variable for DC
• DCs data was much higher than the 50 states
• R-squared value increased because the absence of
  DCs data decreased the sum of residuals

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• Introduction of dummy variable for DC
• DCs data was much higher than the 50 states
• R-squared value increased because the absence of
  DCs data decreased the sum of residuals

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• Normal residuals
• No heteroskedasticity

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Multi-variable regressions

• Crime rate, food stamps, and homeless per 1000
• In order to test the three most highly
  significant variables against unemployment
• Determined that a significant relationship exists
  with participation in the food stamps program
  being the most significant variable

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• Normal Residuals
• No heteroskedasticity

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• Introduction of dummy variable for DC
• Increased R2 by decreasing sum of residuals

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Surprising Findings

• Percent of population with no health insurance
  does not correlate with unemployment rate
• Percent of adults with bachelors does not
  correlate with unemployment rate

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Conclusions

• Unemployment positively correlated with
• Participation in the food stamps program
• Homeless rate per 1000 people
• Crime rate per 100,000 people
• Should be the goal of the government to decrease
  unemployment by a reallocation of funds
• Would lead to decrease in crime, homeless rate,
  and poverty

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(End)