New study finds link between unemployment rate and cellphone use

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Researchers have come up with a novel way of tracking unemployment that they say is much faster and more accurate than traditional estimates and surveys done by the federal government. In a study published Tuesday in the Journal of the Royal Society Interface, a team from Northeastern University, Harvard, and MIT found that changes in cellphone use flag shifts in joblessness two to eight weeks sooner than present methods.

What does a cellphone have to do with unemployment? A lot actually, said David Lazer, who heads the Lazer Laboratory at Northeastern and is one of the study’s authors. Humans are creatures of habit. Just think of your morning routine: You snag your wallet, house keys, and phone before you leave the house for the office each day.

So what happens if you lose your job? The researchers theorized that your routine, including your cellphone habits, would change. Not having a daily commute would mean your phone would stop pinging the towers you’d pass en route to work. If there were big layoffs at your building, the region around it might see a drop in the number of calls made. And if you’re unemployed you’d likely make fewer calls in general.

To test their theory, the team looked at two sets of records of European cellphone carriers. One set tracked the cellphone use of a town whose local manufacturing plant laid off 1,100 employees in 2006 — or 15 percent of the town’s workforce. Another looked at 10 million cellphone customers in a country that faced economic upheaval during the recession.

As they suspected, cellphone use and mobility dropped significantly in areas which eventually reported massive unemployment spikes. “We saw a dramatic collective change of behavior” in the days and weeks following layoffs, Lazer said.

Lazer’s prior research has looked at how people tend to communicate during emergencies — including how people tracked loved ones after the Marathon bombings. He said though the parallels might not seem obvious, he believes “mass unemployment events are like slow-motion emergencies,” in that social interactions shift in their wake.

Lazer says he hopes that the government will someday use cellphone data as a tool to keep track of how the economy is doing.

“Oftentimes by the time we detect a recession, it’s over,” he said.

Janelle Nanos can be reached at janelle.nanos@globe.com. Follow her on Twitter @janellenanos.
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