The hypothetical data in the table below displays the percentage that unemployment benefits replace take-home pay for workers in different countries. Country First year Second year After five years Belgium 75% 70% 61% Finland 70% 60% 55% Italy 54% 50% 22% Australia 40% 25% 10% Note: The data cover a worker with a dependent spouse and are net rates after taking into account taxes and other means-tested benefits. Which country would you expect to have the lowest long-term unemployment rate? Finland, Australia, Italy, or Belgium?
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
The hypothetical data in the table below displays the percentage that unemployment benefits replace take-home pay for workers in different countries.
| Country | First year | Second year | After five years |
|---|---|---|---|
| Belgium | 75% | 70% | 61% |
| Finland | 70% | 60% | 55% |
| Italy | 54% | 50% | 22% |
| Australia | 40% | 25% | 10% |
Note: The data cover a worker with a dependent spouse and are net rates after taking into account taxes and other means-tested benefits.
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