This is a simple model of the dynamics of employment in a sector. I built it for a LinkedIn article that describes the situation and the data.
The model is interesting and reasonably robust, but it has (at least) three issues you should know about:
- The initialization in equilibrium isn’t quite perfect.
- The sector-entry decision (Net Entering) is not robust to low unemployment. In some situations, a negative net entering flow could cause negative Job Seekers.
- The sector-entry decision also formulates attractiveness exclusively as a function of salaries; in fact, it should also account for job availability (perceived vacancy and unemployment rates).
Correcting these shortcomings shouldn’t be too hard, and it should make the model’s oscillatory tendencies more realistic. I leave this as an exercise for you. Drop me a note if you have an improved version.
The model requires Vensim (any version, including free PLE).