Physics (Internal)

THE NETWORK PICTURE OF LABOR FLOW

This event is part of the Biophysics/Condensed Matter Seminar Series.

In job markets, there is evidence that some pairs of firms frequently see workers changing jobs between them, while at the same time other firm pairs see little or no worker movement between them. This observation has led to the introduction of the so-called Labor-Flow Network, a firm-to-firm network that acts as the scaffolding for job mobility. In this talk, I present the first model for the dynamics of the workforce in the labor flow network, and adjust it for two countries (Finland and Mexico) where large scale microdata is available for individuals and their employers. I find that the model correctly predicts the steady state of the job market, inspires a new notion of firm-specific unemployment, and also provides a new way to predict firm-size distributions based on microscopic mechanisms.