An agent-based model of the labour market with applications to the post-carbon transition

Thesis

Many countries around the world are facing major economy-wide transitions over the next few decades in order to meet the goals of the Paris Agreement. While much modelling has been done to understand the economic and environmental implications of different transition scenarios, many of these models do not account for labour market frictions that limit workers' mobility. We make a technical and empirical contribution to the question of how worker mobility plays a role in such economic transitions.

The technical contribution of this thesis is to extend a data-driven labour market model that accounts for labour mobility and second order frictions in the labour market. We extend the network-based model to include regional mobility, and also to include multiple job applications, on-the-job search, and wage driven dynamics. We present a deterministic approximation to the full model, notably for multiple job applications in such a model. This approximation enables fast evaluations of the model, which in turn enables exploration of the parameter space, and the use of detailed occupations and multiple regions.

Empirically, we visualise and analyse the network of occupational and regional mobility for Brazil for the first time. We then combine our model with two development pathways for Brazil to study how a productivity shift in either manufacturing or agriculture may affect occupation-level unemployment. We find that a poorly managed productivity shift could increase inequality.

The flexible, data-driven model framework we present can also be used to understand the labour market impacts of other net zero transition policies, as well as other economic transitions, such as automation.

Authors: Berryman, AK

• DOI: 10.5287/ora-wvem6nwrx
• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: University of Oxford
• Language: English
• Subjects: Mathematics