"Half the money I spend on advertising is wasted; the trouble is I don't know which half." - John Wanamaker

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@taivlys asked me to explain the following, so I thought I might as well post it online, more than 2.5 years after I first formulated it:

My Unemployment Theory of Relationships

As Becker's analyses teach us, economic principles can be used to analyse many aspects of life one would not normally think of so examining. As Mwabudike Morgan said, "Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant".

Yet, I feel that just relying on standard economic principles does not lend one sufficient insight into the complex and dynamic human institution that is relationships. As such, it will be profitable to use the lens of another complex and dynamic human institution - employment - to examine it.

Setting up the model

A job and a relationship share many qualities.

Both are generally regarded as desirable, and something you should aspire to have; besides paying you a salary, having one tends to raise your self-esteem and gives you social cred when you attend events like weddings and funerals. On the flip side, unemployment and the state of being single are generally regarded as undesirable.

Given the reality of female mate choice, the best parallel is of women as employers and men as employees; in this model, for simplicity each employer has only one employee. This does not mean that either relationships or employment relations are not mutually beneficial; just that each job will have several applicants who will be screened and then interviewed by the employer.

[Clarificatory Note: Someone said that my theory did not shed much light on the employer's role; actually, apart from the section on employees [men] applying for jobs [relationships] rather than employers [women] going out into the market to find employees, the other points pretty much apply to both genders.

Addendum: I thought just stating Female Mate Choice was enough, but 'Temptation' Chris protested.

As such, let me use her as an example: she said she would never chase a guy]

Whereas having a relationship is like being employed, being single is like having no job. Yet, there are two types of people with no job: the unemployed (who are looking for a job) and those who are not even in the labour force (whether they are discouraged workers, prefer having no job to working (whether independently wealthy or on the dole) or have found something else to do like taking care of kids). The parallels for the latter would be those who have given up looking for a relationship, those who rather be single than attached (whether they have no desire or have their needs fulfilled in other ways) and people who are doing other things in life (like taking care of kids). The vast majority of people, though, take up jobs.

Market entry (job search)

When young and naïve upon first entering the labour market, most people have a dream job in mind but reality quickly gives them a cold shock; the longer you have been unemployed, the crummier the job you’re willing to accept (your reservation wage falls).

In looking for a job, one incurs search costs. Matching agencies and dating agencies (or friends) work the same way in reducing these costs, and often the government is involved in them (well, at least in Singapore - I do not think there are government-run dating agencies in other countries).

When applying for a job, after introducing yourself and establishing a baseline (your CV for a job, and pre-courting behavior for a relationship) you need to go for one or more interviews (and possibly perform other tasks like writing application essays) for the employer to assess one's suitability for the job. While looks do matter somewhat (i.e. this also ties in with your first impression), they are not the main factor determining whether you clinch the job.

During the job application process, you misrepresent yourself to your future employer and hide your bad qualities and he in turn tries to see how you're bullshitting him and oversells the company to you. Before you get a job you’re shown only the good side of it: the bad bits come out only once you’ve clinched it (or you may have heard things from friends).

Yet, if you are a very outstanding individual, you do not need to look for a job: a job will come and look for you (and the power relations will be reversed). Most people do need to put in at least some effort in looking for a job, though.

While on the job

The focus of this exercise is the process of getting and leaving a job, and the phenomenon of unemployment, thus the dynamics of what happens when you are employed will only be briefly touched upon.

Upon first getting a job, you have a honeymoon period during which you are blind to your employer's faults (either due to lack of knowledge or being happy that you are finally employed). A few people are lucky and are happy with their first jobs and enjoy lifetime employment, but in today's world lifetime employment is a rarity due to increased expectations, smoother information flows and such, and even for those in lifetime employment, there is often simmering dissatisfaction.

Once you have a job, your employer may pay you an efficiency wage and give you more than you're theoretically worth. This is because it costs too much or is too much trouble to look for and train (get used to) a new worker. There're also monitoring costs, if the employer wants to make sure you're doing your job and not goofing off (or moonlighting); far easier to pay an efficiency wage.

As you go through each job, you become better at it (although some job skills are job- or industry-specific, in general work experience always helps with your next job) and able to secure an even better one (at least as long as you don't have too many, especially not in a short period of time). This is a good thing, as many people get more and more fed up with their jobs as time passes and want to change jobs: they’re bored, become fussy, find that the existing job doesn't suit them etc. Indeed, when you’ve been employed for a long time, are in or have just come out from a bad job or have just quit a job, you may tell people that you need a break and that some unemployment is good. Yet, many people stay in their jobs although they hate or resent them because the alternative (unemployment) is worse.

Job hopping and moonlighting

Although you might already be in a job, if a better one comes along you often jump at it. However, if you’ve strong ties with your current employer, are risk averse or don’t like change, you’ll stay in your current job. On the other hand, while working at one job, some people may be secretly biding their time and preparing for the next one. Worse, they may moonlight and work multiple jobs, compromising their work performance at each job. The exception, of course, is arrangements allowing for this like polygyny and polyamory, but such arrangements are few and far between in the modern world.

Unemployment

There’re many types of unemployment. Cyclical unemployment comes about when, for example, guys go into NS. Frictional unemployment is when you’re in between relationships, due to incomplete or erroneous information about market conditions. Structural unemployment is when some people have attributes that’re simply not in demand (e.g. nice guys or ugly girls); they need retraining (asshole training and plastic surgery respectively). Or there’s hidden unemployment – people not officially counted as unemployed but actually are (either discouraged workers, those who have retired early [e.g. widows and widowers] etc). Underemployment is also an issue – they don’t really want to employ you but can’t fire you because of social or sentimental reasons or are hoping you’ll buck up before they let you go.

Whatever the cause of unemployment, while people may be happy when they first become unemployed, now having the time to rest, pursue hobbies and catch up with friends, the longer they're unemployed the more desperate they become for a job. Some of course graduate into long term unemployment, being on the dole for long periods of time (or maybe forever) and never finding new work (not least because the longer you’ve been unemployed the worse it looks to employers). A few become discouraged workers and drop out of the labour force, not actively looking for employment anymore. This might not be so bad, but then a job is not only about money. It's also about self-esteem, career advancement, networking opportunities, something to do in the day et al.

Conclusion

Many other extensions can be proposed to the theory, but the idea remains the same.

Of course, parallels are not perfect, but as with a standard economic model the real world does not have to be ported in wholesale. The insights are what are important.