A simple mathematical model for unemployment: a case study in Portugal with optimal control

TL;DR

This paper introduces a straightforward mathematical model for unemployment, demonstrating its realism and usefulness through a Portugal case study, and explores optimal control solutions for policy implications.

Contribution

The paper presents a simple yet more realistic unemployment model and applies optimal control to derive policy insights using real Portugal data.

Findings

Model outperforms recent complex models in realism

Optimal control yields actionable policy strategies

Case study confirms model's practical relevance

Abstract

We propose a simple mathematical model for unemployment. Despite its simpleness, we claim that the model is more realistic and useful than recent models available in the literature. A case study with real data from Portugal supports our claim. An optimal control problem is formulated and solved, which provides some non-trivial and interesting conclusions.