Job Placement Agencies in an Artificial Labor Market
Authored by Marcin Wozniak
Date Published: 2016
DOI: 10.5018/economics-ejournal.ja.2016-29
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Abstract
In this paper, an agent-based search and matching (ABSAM) model of a
local labor market with heterogeneous agents and an on-the-job search is
developed, i.e. job seekers who vary in unemployment duration, skills
levels and preferences compete for vacancies which differ for skills
demands and the sector of the economy. Job placement agencies help
unemployed persons find appropriate job vacancies by improving their
search effectiveness and by sharing job advertisements. These agents
cooperate in an artificial labor market where the key economic
conditions are imposed. The interactions between the participants are
drawn directly from labor market search theory. The main research task
was to measure the direct and indirect impacts of labor market policies
on labor market outcomes. The global parameters of the ABSAM model were
calibrated with the Latin hypercube sampling technique for one of the
largest urban areas in Poland. To study the impact of parameters on
model output, two global sensitivity analysis methods were used, i.e.
Morris screening and Sobol indices. The results show that the job
placement agencies' services, as well as minimum wage and unemployment
benefits, considerably interact with and influence unemployment and
long-term unemployment ratios, wage levels, duration of periods of
unemployment, skills demand, and worker turnover. Moreover, strong
indirect effects were detected, e.g. programs aimed at one group of job
seekers affected other job seekers and the whole economy. This impacts
are sometimes positive and sometimes negative.
Tags
Agent-based models
Design
Duration
Sensitivity-analysis
Matching model
Equilibrium
unemployment
Cyclical behavior
Wage dispersion
Search models
Vacancies