Rule-Based Modeling of Labor Market Dynamics

Abstract:     
The dynamics of unemployment and its response to measures taken to counter rising unemployment are not fully understood today. Their formal description often assumes homogeneity among individual agents in the labor market. Agent based frameworks allow for the faithful description of heterogenous systems and are thus well suited for a more detailed description of labor market dynamics. Here, we introduce rule-based modeling as a novel approach of agent-based modeling with regard to the description of labor market dynamics. We demonstrate that the main advantages of rule-based modeling, such as the implicit enumeration of the state space, can be efficiently exploited in the description of socio-economic interactions.

Number of Pages in PDF File: 23

Keywords: Computational Economics, Rule-Based Modeling, Labor Market Dynamics

JEL Classification: C63, J01, J63

working papers series