Microsimulating the labour market: a prototype#(in French)

Several tools are routinely used to predict or analyze the impact of employment policies: macroeconometric models, small-scale GE models, ex post evaluations based either on macroeconomic time series or on microeconomic data. We present here a new instrument whose methodology is intermediate between traditional microsimulation and the more recent agent-based approach to economic modelling. The prototype that we have built simulates job creations and destructions, labour force ageing and renewal, the dynamic matching process between jobs and individuals, and a basic process of wage negotiation for insiders. These processes take place under constraints of profitability and global demand by types of goods/skills. The model has been calibrated to reproduce some stylized characteristics of French unemployment and private salaried employment. It is then applied to the simulation of a certain number of shocks: a demographic shock, a shock on the minimum wage, or changes in employers’ social security contributions. The model is able to produce results that are comparable to those provided by existing tools, but it has a stronger potential for analysing detailed consequences of employment policies. A more comprehensive version of such a model would be a useful addition to the toolkit that is currently available to labour market analysts.