A network model of labor market dynamics

Oxford Mathematicians and Economists Maria del Rio-Chanona, Penny Mealy, Mariano Beguerisse-Díaz, François Lafond, and J. Doyne Farmer discuss their network model of labor market dynamics.

“Mathematics has explained many physical, chemical, and biological phenomena, but can it explain how the economy works? It is challenging because the economy is highly diverse, and ever-changing, with both short term fluctuations – it goes through recession and recovery periods – and long-term structural change – innovation transforms the scope and diversity of what we do.

Take the labor market, for example. Figure 1 shows what we call the occupational mobility network (1) – each node is an occupation, and the links show how likely it is that a worker in an occupation moves to another occupation. Clearly, there are many different occupations, and some occupational transitions are more likely than others. How can we model the dynamics of the labor market while taking this into account (click figure to enlarge)?

Read the full article at: www.maths.ox.ac.uk