Great work, directly applicable

Back to my theme on labor markets.  Here we have a paper that finds congestion in the jobs market when the market is treated as a generator (constricted channel under adaptive flow).  They are doing a bit of -iLog(i) type logistics, they are us.

But treating segments of the job market as a generator goes a long way toward automating the job search process, anonymously.  Hire these folks immediately: 

Then, using our new estimates on the earning distribution we assess the extent of bunching at the minimum wage. Building on Harasztosi and Lindner (2016) and Meyer and Wise (1983), we argue that the extent of bunching depends on the behavioral response to the minimum wage. If behavioral responses are limited, e.g., because the dierent type of labors complements each other, then all workers who earn below the new minimum wage bunch at the minimum wage. On the other hand, if workers are substituted by higher skilled workers, then no bunching will occur at the new minimum wage.

What they find is that the economy obeys the minimum wage law and moves skilled workers up a bit and unskilled down a bit.  What they miss is the effect on underground labor, the stuff that misses measurement.   So, if the labor market is treated as a value added, sphere packing channel, then the data has an entire generator.

The underground labor market effect is like emitting particles, gone and unmeasured.  It represents households  declassifying some of their labor as wage labor,moving it internal.

ANd the other issue, labor is not generator stable. Labor is a two layer deal with hiring managers coming first then hiring.  It captures the retained information problem,  labor markets are not revelatory.  After the public search, the hiring managers and hiree both retain information which is unriced. So the idea is to expand the public information by using anonymity to reveal more, up front and make the hiring manager more efficient.