Career plans and wage structures: a mean field game approach
Abstract
This paper exemplifies the relationships between career plans and wage structures. It relies on an innovative methodological approach leveraging the mean field games (MFG) theory developed by Lasry and Lions. We show how an individual can leverage wage structure data in a given labor market to come up with an income optimal career trajectory. Additionally, we also show how our approach can be used to estimate job search cost in a labor market. Similarly we show that the same thought process can be applied by firms to structure their internal labor market. Finally we leverage the analytical solutions of our framework and calibrate them to the market data to further our discussion.
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