An iteration process for calculating labour market flows
Nissim Ben David · Applied Economics · 2008
This article presents a technique for calculating labour market flows, given labour market stocks of workers and nonemployed agents at the beginning and at the end of a certain period of time. I build a system of equations that define the stocks as a product of the flows. For a vector of stocks Y and a vector of flows X, the system of equations is defined as Y = A*X. However, the system is not solvable (the flows cannot be identified) due to singularity of the matrix A. I suggest an iteration process that enables us to solve the system and identify the flows given a chosen negligible deviation from the true flows.