Application of the Time Series Analysis on Unemployment Rates in Malaysia

Lim, Hui Jing (2022) Application of the Time Series Analysis on Unemployment Rates in Malaysia. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

This research investigates the Application of Time Series Analysis on Unemployment Rate in Malaysia. The data of unemployment rate (percentage) in Malaysia were collected from March 2010 to July 2021. These data were analyzed by using time series analysis in this research. After analyzing the data, the forecasting of the unemployment rate in August 2021 of Malaysia also has been done in this research. Time series analysis has been discussed deeply in this research. First, this research discusses the definition of time series and the definition of unemployment rate. Then, a number of research papers and journals are reviewed in order to have a clear understanding on the application of the time series analysis. The types of time series have been introduced first in the part of methodology. Basically, time series have three types which are white noise, stationary time series and non-stationary time series. Then, the models of time series also have been investigated. In this research, we only investigated 4 models of time series which are Auto-Regressive Model (AR), Moving Average Model (MA), Auto-Regressive Moving Average Model (ARMA) and Auto-Regressive Integrated Moving Average Model (ARIMA). After that, the flow to generate a time series model has been stated in this research. Following this, SPSS software was used to do the time series analysis and generate an ARIMA model of the unemployment rate time series. In the result, we get an ARIMA (0,1,1) model of the time series. More details about this time series and ARIMA model have been stated in the research. By using the ARIMA model, we can do the forecasting of the unemployment rate in August 2021. In the end, a conclusion has been made and there are also some limitations of this research that have been conducted. Based on this, some suggestions for future research need to be taken into consideration.