Commentary

Economists Use Mobile Data To Track Impact Of Mass Layoffs

Mobile data is providing unexpected insights into all sorts of aspects of human behavior -- and now you can add depressed moping to the list. Economists are now using anonymized mobile data to understand the impact of mass layoffs across society, including the ways they may lead to long-term unemployment.

As described in the paper, titled “Tracking Employment Shocks Using Mobile Phone Data,” a team of economists from MIT, Harvard, Northeastern, the University of Pittsburgh, and UC Davis analyzed mobile data from a small European town that was home to a large car parts factory in Europe until it closed in December 2006. The closure resulted in the layoffs of over a thousand workers in a town with a total population of just 15,000, delivering a body blow to the local economy.

By analyzing anonymized data on mobile phone activity for around 2,000 people from a 15-month period before and after the plant closed, including the time and location where calls were made, the researchers were able to demonstrate that the number of calls made fell off sharply after the layoffs, suggesting a correlated decline in social activity. The decline extended to actual physical mobility, as laid-off employees moved around less, leading to a broader decline in social networks. Although the study didn’t specify where the laid-off people spent most of their time, I’m going to go ahead and guess it was the couch at home, because that’s where the beer and potato chips are.

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Of course depression and malaise aren’t the only possible culprits: I’m guessing laid-off employees may also have moderated their mobile usage, or given up their mobile devices altogether, in order to save money. However the ultimate impact on their lives could well be the same, with decreased mobile device activity associated with a falloff in social activity.

Although the authors didn’t delve into this in the paper, the study would seem to have implications for policymakers and civic institutions trying to combat unemployment. Other studies have shown that personal social networks are one of the most important ways people can hear about new job opportunities. If a laid-off person allows his social contacts to lapse, his chances of finding new employment will also start to dwindle. The research suggests that efforts to engage laid-off workers via mobile (and face-to-face interaction) could help them stay in the job market, as well as bolstering their emotional well-being.

1 comment about "Economists Use Mobile Data To Track Impact Of Mass Layoffs ".
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  1. JD Norman from Digitas, June 8, 2015 at 2:42 p.m.

    Interesting story. A little put off by the Erik's assumption that laid-off people are spending their time on the couch drinking beer and eating potato chips. If it's meant to be a joke, it's a poor one. If it's not a joke, I'm even more discouraged by the presumption. Try harder and show a little empathy in your writing. 

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