Comparison of Optimal Control Solutions in a Labor Market Model



Table 1

Endogenous Variables in the Model.

Description

Variable

Wages

w

Vacancies

V

Inflow of vacancies

VI

Total unemployment

U

Total employment

E

Short-term unemployment

US

Monthly short-term unemployment

Uk,   k= 1,..., 12

Long-term unemployment

UL

Probability of escape from unemployment

π

Total flow from employment to unemployment

FEU

Flow from unemployment to newly created jobs; job creation

FUEV

Flow from employment to not-in-labour-force; job destruction

FENV

Flow from not-in-labour-force to newly created jobs; job creation

FNEV

Flow of new vacancies to unemployed workers

VOU

Table 2

Exogenous Variables in the Model.

Description

Variable

Flow of vacancies to non-unemployed workers

V OEX

Outflow from unemployment to employment other than job creation

FUEX

Outflow from employment to unemployment other than job destruction

FEU X

Added value per worker

y

Interest rate

r

Lump-sum taxes

τ

Unemployment benefits

b

Proportion of long-term unemployed in ALMPs

λ

3 The Control Methods

3.1 Purpose of the Control

We consider the unemployment rate to be the output of the model. The control
objective is to generate a policy for ALMPs that reduces the unemployment



More intriguing information

1. Does South Africa Have the Potential and Capacity to Grow at 7 Per Cent?: A Labour Market Perspective
2. Exchange Rate Uncertainty and Trade Growth - A Comparison of Linear and Nonlinear (Forecasting) Models
3. PROTECTING CONTRACT GROWERS OF BROILER CHICKEN INDUSTRY
4. Economic Evaluation of Positron Emission Tomography (PET) in Non Small Cell Lung Cancer (NSCLC), CHERE Working Paper 2007/6
5. AJAE Appendix: Willingness to Pay Versus Expected Consumption Value in Vickrey Auctions for New Experience Goods
6. American trade policy towards Sub Saharan Africa –- a meta analysis of AGOA
7. The Tangible Contribution of R&D Spending Foreign-Owned Plants to a Host Region: a Plant Level Study of the Irish Manufacturing Sector (1980-1996)
8. The name is absent
9. Running head: CHILDREN'S ATTRIBUTIONS OF BELIEFS
10. Can genetic algorithms explain experimental anomalies? An application to common property resources