Access to an extremely large amount of data has enabled us to pursue research endeavors that just a couple of years ago seemed unimaginable. Examples of amazing big data applications in the field of economics are all over the place: using job-portals data to inform labor market policies; analyzing citizens’ reactions to public policies using Twitter; creating daily inflation data using billions of records from online retailers around the world; and even measuring economic growth from outer space!
The data revolution is open to anyone with the right tools, and big data can be useful to answer policy questions. Pairing big data with some of the traditional methods of data gathering such as household surveys can yield timely information and can help shape appropriate policy responses. For instance, traditional household surveys, from which unemployment estimates are calculated could carry outdated employment data by the time they become available. But big data can complement this effort in places where unemployment rates correlate with the frequency with which people use Google to search for jobs, as in the case of Brazil, that could be used to estimate real-time unemployment rates.
Monthly unemployment rate and google searches for “looking for a job” in Brazil, 2006-17