Employment Growth through Labor Flow Networks

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dc.contributor.authorGuerrero, Omar A.
dc.contributor.authorAxtell, Robert L.
dc.date.accessioned2015-10-29T15:49:06Z
dc.date.available2015-10-29T15:49:06Z
dc.date.issued2013-05-02
dc.description.abstractIt is conventional in labor economics to treat all workers who are seeking new jobs as belonging to a labor pool, and all firms that have job vacancies as an employer pool, and then match workers to jobs. Here we develop a new approach to study labor and firm dynamics. By combining the emerging science of networks with newly available employment micro-data, comprehensive at the level of whole countries, we are able to broadly characterize the process through which workers move between firms. Specifically, for each firm in an economy as a node in a graph, we draw edges between firms if a worker has migrated between them, possibly with a spell of unemployment in between. An economy's overall graph of firm-worker interactions is an object we call the labor flow network (LFN). This is the first study that characterizes a LFN for an entire economy. We explore the properties of this network, including its topology, its community structure, and its relationship to economic variables. It is shown that LFNs can be useful in identifying firms with high growth potential. We relate LFNs to other notions of high performance firms. Specifically, it is shown that fewer than 10% of firms account for nearly 90% of all employment growth. We conclude with a model in which empirically-salient LFNs emerge from the interaction of heterogeneous adaptive agents in a decentralized labor market.
dc.description.sponsorshipPublication of this article was funded in part by the George Mason University Libraries Open Access Publishing Fund.
dc.identifier.citationGuerrero OA, Axtell RL (2013) Employment Growth through Labor Flow Networks. PLoS ONE 8(5): e60808.
dc.identifier.doihttp://dx.doi.org/10.1371/journal.pone.0060808
dc.identifier.urihttps://hdl.handle.net/1920/9993
dc.language.isoen_US
dc.publisherPublic Library of Science
dc.rightsAttribution 3.0 United States
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/us/
dc.subjectEmployment
dc.subjectLabor economics
dc.subjectAgent-based modeling
dc.subjectFinland
dc.subjectJobs
dc.subjectMexico
dc.subjectEconomics
dc.subjectGraphs
dc.titleEmployment Growth through Labor Flow Networks
dc.typeArticle

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