Matching Markets Used to Describe Unemployment
Right now in class, we are learning about matching markets- things allocated to people, where people reveal their preferences. An example of matching markets is people applying to jobs- the left hand side is the list of jobs available and the right hand side consists of all people who want a job. There is an edge between a node on the right hand side to all jobs they are interested in applying for. This sort of structure can be used to describe job markets and unemployment in the United States.
This blog from the Huffington Post details how hard it is to be unemployed as a struggling actor. It claims that the unemployment rate for actors is 90%. This number is incredibly high and showcases how hard it is for actors to land roles or get jobs.
This can be explained using the network I described above. On the left hand side with the jobs, there are very few openings for new actors, as there isn’t an overwhelming number of new movies or tv shows or plays where actors could land roles. On the right side however, there are thousands of aspiring actors who are looking to land roles. People who studied musical theater probably only have edges connected them to plays and musicals, and people who study screen acting probably only have edges connected them to TV show and movie jobs. This bipartite graph has a constricted set because there are way more aspiring actors than there are jobs for them. Thus, there is no perfect matching and this leads to mass unemployment in the acting/theater industry.
Likewise, this sort of analysis can also be used to partially explain the general unemployment rate in the United States. People have skills for certain jobs when there just aren’t that many openings in that industry. The edges go from the person to the job that they would like, and that job is so overly desired while others are not. This leads to a constricted set and no perfect matching can be made.