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Artificial Market Approach to Employment Targeting: A Possibility of 'Smart' Employment Policy (in Korean)

Author

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  • Du Yong Kang

    (Korea Institute for Industrial Economics & Trade)

Abstract

Based upon the joint design of a quantitative target and market tools, policies with an artificial market approach are expected to attain a socially-set target with high efficiency. (For example, the emission trading system theoretically attains an emission control target with minimum costs.) Since the issue of employment has a quantitative target with a high degree of social consensus, or full employment, and the related activities such as hiring and lay-off can be easily reflected to the trading market, employment policy seems to be a promising area for utilizing the artificial market. As an exploration of the artificial market approach to employment policy, this paper introduces a policy idea, tentatively named "employment credits trading system," and examines its expected effects. The idea is about a hiring-subsidy-based trading system, where a unit subsidy is determined as the price of a tradable credit that clears the trading market under the (un)employment target. The scheme could accomplish the employment target with minimum social costs and suggests a possibility of a more efficient and precise employment targeting.

Suggested Citation

  • Du Yong Kang, 2015. "Artificial Market Approach to Employment Targeting: A Possibility of 'Smart' Employment Policy (in Korean)," Economic Analysis (Quarterly), Economic Research Institute, Bank of Korea, vol. 21(3), pages 76-102, September.
    • Handle: RePEc:bok:journl:v:21:y:2015:i:3:p:76-102
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    More about this item

    Keywords

    Tradable credits; Employment policy; Artificial market;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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