Template-Type: ReDIF-Paper 1.0 

Author-Name: Alexandra Glazova
Author-Email: glazovaam@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation

Title: The labour market: details matter 
Abstract: In this paper, I introduce labour market mechanisms used in partial equilibrium models, microdata econometric studies, and research in psychology and sociology to an agent-based macroeconomic model. These mechanisms include skill-based worker switching, skill loss during unemployment, and the skill-dependence of wages. I show that when a large supply shock occurs, these complexities prevent GDP from fully recovering, at least in the medium term: the GDP gap between the shock and no-shock scenarios persists even five years after the shock, whereas no such difference is observed in the baseline model. I also show that the aggregate modelling shock affects different industries differently, and this effect is statistically significant depending on the level of skills required in a given industry. Finally, I demonstrate that training programmes for new workers in just the two most affected industries have a comparable impact to training a much larger number of workers with no industry-specific constraints.

Length: 39 pages
Creation-Date: 2026-08
Revision-Date:
Publication-Status: 
File-URL: https://cbr.ru/StaticHtml/File/197503/wp_176.pdf
File-Format: Application/pdf
File-Function:
Number: wps176
Classification-JEL:  C63, J24, J31, J62, J63, J64, J68. 
Keywords: Agent-Based Modelling, Simulation Modelling, Labour Market Frictions, Human Capital, Labour Mobility, Wages, Employment, Formal Training Programmes, Learning by Doing, Skill, Retraining, Skill Based, Career Change, Occupational Mobility, Job Search, Retraining Programme 
Handle:RePEc:bkr:wpaper:wps176