Simulation modeling of taxpayers’ behavior on the labor market in Ukraine

Kyrylo Vasylchenko
PhD in Economics, Senior Lecturer, Department of Economic Cybernetics and Information Technologies, Odessa National Economic University, Ukraine, e-mail: abm.kgvas@gmail.com, ORCID ID: https://orcid.org/0000-0002-5377-7855

Cite this article:

Vasylchenko, K. (2020). Simulation modeling of taxpayers’ behavior on the labor market in Ukraine [Imitatsiine modeliuvannia povedinky platnykiv podatkiv na rynku pratsi v Ukraini], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 3-4 (74-75), pp. 21–32.

Abstract

The article analyzes some components of the shadow economy using the example of modern Ukraine. The purpose of article is to predict the behavior of the economically active population when choosing an employment option using an agent-based simulation model. The work uses the methods of theoretical generalization, retrospective analysis – to study the theoretical aspects of socio-economic relations at the enterprise; system analysis, agent-based modeling – to develop a decision-making model in the labor market. The proposed algorithm of taxpayer behavior is based on studies of domestic and foreign scientists in the field of shadow economy and informal employment. Particular attention is paid to the national economic mentality as an important factor which determines the trajectory of the country’s development. As a substantiation of the subject’s behavior on the labor market, it is proposed to use the model of decision-making by a taxpayer, developed by M. Ellingham. When constructing an algorithm for the behavior of an employee, the demographic situation in Ukraine, the causes and consequences of labor migration, and the mental characteristics of the population were analyzed. The novelty of the proposed model lies in the fact that it takes into account the dependence of the taxpayer’s utility curve on the taxpayer’s age. The developed model was applied to forecasting of the demographic situation in Ukraine, and to estimation of the population participation in the informal economy sector.

Keywords

shadow economy; informal employment; shadow economy modeling; agent-based modeling; labor market.

JEL classification: C630; C800; J110; J330; DOI: https://doi.org/10.33987/vsed.3-4(74-75).2020.21-32

UD classification: 330.4:331.5

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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