Mathematical modeling of unemployment dynamics with skills development and cyclical effects

Abstract

In the present work, a new mathematical model is introduced to investigate the effects of skills development on the governance of cyclical unemployment. A system of non-linear differential equations is formed and analyzed. In the modeling approach, we categorize the considered workforce into three distinct classes: the fundamentally unemployed Us, employed individuals E and cyclically unemployed people Uc. We also make the assumption that some government programs can qualify individuals who have been out of work for a period to reintegrate and prevent them from becoming long-term unemployed. The qualitative analysis of differential equations is used to analyze the proposed model. It has been demonstrated that the suggested model has only one equilibrium that is globally asymptotically stable under particular conditions. The impact of key parameters is analyzed by examining their sensitivity. In order to verify the important theoretical results, numerical illustrations of the model have been performed. The obtained results demonstrate that the development of skills among the cyclically unemployed is effective in reducing unemployment.

Keywords

• Unemployment
• Cyclical unemployment
• Skills development
• Mathematical model
• Sensitivity analysis
• Simulation