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Regional dependencies in job creation: an efficiency analysis for Western Germany

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  • Rene Fahr
  • Uwe Sunde

Abstract

This paper investigates the efficiency of the matching process between job seekers and vacancy posting firms in West Germany, using variation across labour market regions and across time. The results of a stochastic frontier analysis shed new light on the extent of and regional differences in search frictions, on potential determinants of frictional inefficiencies and on the consequences of German reunification for the matching process. The paper also presents novel evidence on the complex interactions between spatial contingencies among regional labour markets: matching efficiency decreases with spatial autocorrelation in hiring, implying indirect evidence for crowding externalities.

Suggested Citation

  • 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.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:10:p:1193-1206
    DOI: 10.1080/00036840600685140
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    References listed on IDEAS

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    More about this item

    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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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