Social Physics of Unemployment

From Almaatouq, A., Prieto-Castrillo, F., & Pentland, A. (2016). Mobile Communication Signatures of Unemployment. arXiv preprint arXiv:1609.01778. Chicago


Earlier studies proved that behavior is highly shaped and constrained by one's social networks, and demonstrated ways in which individuals can manipulate these networks to achieve specific goals. A great example is the much-studied "strength of weak ties" hypothesis, which states that the strength of a tie between A and B increases with the overlap of their friendship circles, resulting in an important role for weak ties in connecting communities. Mark Granovetter first proposed this idea in a study that emphasized the nature of the tie between job changers in a Boston suburb and the contacts who provided the necessary information for them to obtain new employment. Basically, although people with whom the job seekers had strong ties were more motivated to provide information, the structural position of weak ties played a more important role. The implication is that those to whom one is weakly tied are more likely to move in different circles, and will thus have access to different information than the people to whom you are tied more strongly.

Much of our knowledge about how mobility, social networks, communication, and education affect the economic status of individuals and cities has been obtained through complex and costly surveys, with an update rate ranging from fortnights to decades. However, recent studies have shown the value of mobile phone data as an enabling methodology for demographic modeling and measurement.

Many of our daily routines are driven by activities either afforded by our economic status or related to maintaining or improving it, from our movements around the city, to our daily schedules, to our communication with others. As such, we expect to be able to measure passive patterns and behavioral indicators, using mobile phone data, that could describe local unemployment rates. To investigate this question, we examined anonymized mobile phone metadata combined with beneficiaries' records from an unemployment benefit program. We found that aggregated activity, social, and mobility patterns strongly correlate with unemployment. Furthermore, we constructed a simple model to produce accurate reconstructions of district-level unemployment from mobile communication patterns alone.

Our results suggest that reliable and cost-effective indicators of economic activity could be built based on passively collected and anonymized mobile phone data. With similar data being collected every day by telecommunication services across the world, survey-based methods of measuring community socioeconomic status could potentially be augmented or replaced by such passive sensing methods.