A new network perspective in the study of labour markets

• Published in: Mathematical methods in the applied sciences Vol. 41; no. 6; pp. 2261 - 2268
• Main Authors: Lloret‐Climent, Miguel, Nescolarde‐Selva, Josué Antonio, Mora‐Mora, Higinio, Signes‐Pont, María Teresa
• Format: Journal Article
• Language: English
• Published: Chichester, UK John Wiley & Sons, Ltd 01.04.2018; Wiley Subscription Services, Inc
• Subjects: chaos; Chaos theory; circular flow; cycle; economic; Economic analysis; Economic models; Graph theory; Graphical representations; input–output; Invariance; Labor market; Markets; Mathematical analysis; Mathematical models; Networks; networks models
• ISSN: 0170-4214; 1099-1476
• DOI: 10.1002/mma.4208

Graph theory is a fundamental tool in the study of economic issues, and input–output tables are one of the main examples. We use the interpretation of the labour market through networks to obtain a better understanding on its overall functioning. One benefit of the network perspective is that a large body of mathematics exists to help analyze many forms of networks models. If an economic system has obtained a suitable model, then it becomes possible to utilize relevant mathematical tools, such as graph theory, to better understand the way the labour market works. This interpretation allows us to employ the concepts of coverage, invariance, orbit and the structural functions supply–demand and competition and interpret them from the point of view of circular flow. In this paper, we aim to interpret the labour market through networks that are represented by graphs and where characteristic concepts of chaos theory such as cover, invariance and orbits interact with the concept circular flow. Finally, an example of this approach to labour markets is described, and some conclusions are drawn. Copyright © 2016 John Wiley & Sons, Ltd.