Theoretical Model of Labor Patterns: Study Case Transition from Public Sector to Private Sector

Abstract

In this paper we try to analyze the selection mechanism of the labor force used by the private sector.
As we know the objective of a private firm is the maximization of the profit, in order to fulfill this goal,
the employer has to select the necessary number of skilled and unskilled workers, according to the
technology of production. In our model we can see the unemployment resulting from the gap between
the supply and the demand for labor affects only the unskilled individuals. The existence of
unemployment among qualified individuals could be explained by the fact that the selection process
has been done gradually. The higher salaries offered by the private sector determined the workers to
quit prematurely their job; the supply of skilled labor was higher than the possibilities of absorbing
those resources existing in the private sector.