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Job search and hiring in local labor markets: Spillovers in regional matching functions

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  • Haller, Peter
  • Heuermann, Daniel F.

Abstract

In this paper we take a fresh look at the job matching process within local labor markets in Germany. Drawing on smaller geographic units than the previous literature, we estimate regional matching functions on NUTS 3 level for the years 2000 to 2010. The elasticity between matches and unemployment ranges between 0.4 and 0.5 with 75% of this effect being driven by the impact that unemployment has on matches in neighboring regions. The effect of vacancies on matches is substantially smaller but also robustly positive. Bayesian model comparison tests suggest that spillovers from unemployment and vacancies are confined to local labor markets, which are best approximated by geographical distance rather than by present or past infrastructure or commuter numbers. Spillovers from unemployment arise exclusively after a series of major labor market reforms (‘Hartz Reforms') have been implemented between 2003 and 2005, indicating that the reforms have contributed to an increased spatial mobility of the unemployed.

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  • Haller, Peter & Heuermann, Daniel F., 2016. "Job search and hiring in local labor markets: Spillovers in regional matching functions," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 125-138.
    • Handle: RePEc:eee:regeco:v:60:y:2016:i:c:p:125-138
    DOI: 10.1016/j.regsciurbeco.2016.06.007
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    Cited by:

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    2. Peter Haller & Daniel F. Heuermann, 2020. "Opportunities and competition in thick labor markets: Evidence from plant closures," Journal of Regional Science, Wiley Blackwell, vol. 60(2), pages 273-295, March.
    3. Wozniak, Marcin, 2021. "Spatial matching on the urban labor market: estimates with unique micro data," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-11.
    4. Yang Lu & Longji Zeng, 2022. "How Do High-Speed Railways Facilitate High-Quality Urban Development: Evidence from China," Land, MDPI, vol. 11(9), pages 1-15, September.
    5. Daniel F Heuermann & Johannes F Schmieder, 2019. "The effect of infrastructure on worker mobility: evidence from high-speed rail expansion in Germany," Journal of Economic Geography, Oxford University Press, vol. 19(2), pages 335-372.
    6. Ángel L. Martín‐Román & Jaime Cuéllar‐Martín & Alfonso Moral, 2020. "Labor supply and the business cycle: The “bandwagon worker effect”," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1607-1642, December.
    7. Wozniak, Marcin, 2021. "Spatial matching on the urban labor market: estimates with unique micro data," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55(55), pages 1-.11.
    8. Marcin Wozniak, 2021. "Spatial matching on the urban labor market: estimates with unique micro data," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-17, December.
    9. Higashi, Yudai, 2018. "Spatial spillovers in job matching: Evidence from the Japanese local labor markets," Journal of the Japanese and International Economies, Elsevier, vol. 50(C), pages 1-15.
    10. Shi, Wenming & Lin, Kun-Chin & McLaughlin, Heather & Qi, Guanqiu & Jin, Mengjie, 2020. "Spatial distribution of job opportunities in China: Evidence from the opening of the high-speed rail," Transportation Research Part A: Policy and Practice, Elsevier, vol. 133(C), pages 138-147.
    11. Nasser Dine Mohamedou, 2022. "Labor mobility within Japanese regional labor markets and spillover effects," The Japanese Economic Review, Springer, vol. 73(4), pages 625-645, October.
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    More about this item

    Keywords

    Local labor markets; Matching function; Commuting; Transport infrastructure;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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