| Nonlinear Dynamics, Psychology, and Life Sciences, Vol. 27, Iss. 1, Jan, 2023, pp. 61-85 @2023 Society for Chaos Theory in Psychology & Life Sciences The Labor Market with People in It: Personality Traits and Employment Dynamics Abstract: Issues pertaining to the organization and efficiency of the labor market
and to the dynamics of employment and unemployment have always been at the forefront
of the concerns of economists. Typically, such issues are approached through the
analysis of the conflicting interests of a representative worker and of a representative
firm, each of which intending to maximize the corresponding intertemporal objective
function. Much of the research undertaken on this subject neglects the fact that each
person is unique and endowed with different personality traits that influence their
educational attainment, their ability to access jobs, their productivity while employed,
and also their willingness to support, through social welfare mechanisms, those who become
unemployed. In this research, we propose a simulation model to approach the dynamics of
the labor market. The model conceives an economy populated by a large number of
individuals who, over their life cycles, acquire education, search for a job, receive a
wage while employed, and access an unemployment benefit while out of work. Because
individuals are endowed with different personalities, they experience different
degrees of professional success over their life cycles. Such reasoning leads to a labor
market aggregate outcome characterized by emergent phenomena, out-of-equilibrium,
path dependence, and other features that are characteristic of a complex evolving
system. In the proposed setting, the personality of individuals is shaped by taking
into account the big five personality traits of psychological analysis, namely openness
to experience, conscientiousness, extraversion, agreeableness, and neuroticism. Keywords: personality traits, labor market, job search, job destruction, endogenous, fluctuations |