Abstract
AbstractIn 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 longterm 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.
Highlights
The past two decades have been a time of persistent unemployment, in European countries, and the duration of time out of work in the EU-28 has grown gradually lately
The paper is structured as follows: section two deals with the most important literature concerning labor market search theory and agent-based modeling; section three presents the theoretical assumptions, the developed agent-based search and matching (ABSAM) model and calibration procedure: Latin hypercube sampling is used to calibrate the global parameters of the model; section four presents general model performance: simulated time series are plotted and discussed; section five develops two global sensitivity analysis techniques: Morris screening is used to study the general influence of all global parameters and the Sobol technique is used for a more indepth analysis of the impact of the six active labor market programs (ALMPs) parameters on the developed economy; section six concludes and presents main findings
Some changes in the number of jobs in the given three sectors of the economy are visible if we activate the ALMP parameters (Figure 4): a 3% increase in the number of services jobs was observed, while the number of agricultural jobs decreased by 8.5%
Summary
The past two decades have been a time of persistent unemployment, in European countries, and the duration of time out of work in the EU-28 has grown gradually lately. The paper is structured as follows: section two deals with the most important literature concerning labor market search theory and agent-based modeling; section three presents the theoretical assumptions, the developed ABSAM model and calibration procedure: Latin hypercube sampling is used to calibrate the global parameters of the model; section four presents general model performance: simulated time series are plotted and discussed; section five develops two global sensitivity analysis techniques: Morris screening is used to study the general influence of all global parameters and the Sobol technique is used for a more indepth analysis of the impact of the six ALMP parameters on the developed economy; section six concludes and presents main findings
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