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Regional Spillovers and Spatial Heterogeneity in Matching Workers and Employers in Germany

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  • Reinhold Kosfeld

    ()
    (University of Kassel)

Abstract

When job search takes place across labour markets, the standard flow approach to labour market analysis fails to uncover the effectiveness at which workers are matched to available jobs. A Spatially augmented matching function is backed by a spatial search model with endogenous search intensity. Recent studies deal with the issue of spatial externalities by assuming the process of job matching to be homogenous across space. This study shows that this supposition is not valid for the unified Germany. Particularly differences in labour mobility give reason for the existence of West-East regimes of the matching process. Spatial heterogeneity is additionally found on the level of German macroregions. Though matching efficiency is affected by labour market characteristics, its cyclical pattern is closely related to business cycle fluctuations. Variation of regional mismatch over the business cycle can only explain a relatively small fraction of matching efficiency.

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Bibliographic Info

Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 227 (2007)
Issue (Month): 3 (June)
Pages: 236-253

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Handle: RePEc:jns:jbstat:v:227:y:2007:i:3:p:236-253

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Related research

Keywords: Matching function; regional mismatch; spatial spillovers; spatial heterogeneity;

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References

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  1. Howitt, Peter & McAfee, R Preston, 1987. "Costly Search and Recruiting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 89-107, February.
  2. Puhani, Patrick A., 1999. "Labour mobility - an adjustment mechanism in Euroland? Empirical evidence for Western Germany, France and Italy," ZEW Discussion Papers 99-47, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Burda, Michael C & Profit, Stefan, 1996. "Matching Across Space: Evidence on Mobility in the Czech Republic," CEPR Discussion Papers 1364, C.E.P.R. Discussion Papers.
  4. Fahr, René & Sunde, Uwe, 2006. "Regional dependencies in job creation: An efficiency analysis for Western Germany," Munich Reprints in Economics 20484, University of Munich, Department of Economics.
  5. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
  6. Burgess, Simon & Profit, Stefan, 1998. "Externalities in the Matching of Workers and Firms in Britain," CEPR Discussion Papers 1854, C.E.P.R. Discussion Papers.
  7. Bhargava, A & Franzini, L & Narendranathan, W, 1982. "Serial Correlation and the Fixed Effects Model," Review of Economic Studies, Wiley Blackwell, vol. 49(4), pages 533-49, October.
  8. Fahr, Rene & Sunde, Uwe, 2006. "Spatial mobility and competition for jobs: Some theory and evidence for Western Germany," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 803-825, November.
  9. Wall, Howard J & Zoega, Gylfi, 2002. " The British Beveridge Curve: A Tale of Ten Regions," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(3), pages 261-80, July.
  10. López-Tamayo, Jordi & Suriñach, Jordi & López-Bazo, Enrique, 2000. "Returns To Matching: The Effect Of Spatial Interactions In Labour Markets," ERSA conference papers ersa00p294, European Regional Science Association.
  11. Fahr, René & Sunde, Uwe, 2006. "Spatial mobility and competition for jobs: Some theory and evidence for Western Germany," Munich Reprints in Economics 20483, University of Munich, Department of Economics.
  12. Rene Fahr & Uwe Sunde, 2006. "Regional dependencies in job creation: an efficiency analysis for Western Germany," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1193-1206.
  13. Wasmer, Etienne & Zenou, Yves, 2005. "Equilibrium Search Unemployment with Explicit Spatial Frictions," IZA Discussion Papers 1465, Institute for the Study of Labor (IZA).
  14. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
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  16. repec:kas:wpaper:2004-64 is not listed on IDEAS
  17. Pekka Ilmakunnas & Hanna Pesola, 2003. "Regional Labour Market Matching Functions and Efficiency Analysis," LABOUR, CEIS, vol. 17(3), pages 413-437, 09.
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Cited by:
  1. Suedekum, Jens, 2006. "Human Capital Externalities and Growth of High- and Low-Skilled Jobs," IZA Discussion Papers 1969, Institute for the Study of Labor (IZA).

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