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Re-employment Probabilities and Returns to Matching

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  • Barbara Petrongolo

Abstract

The assumption of constant returns in the matching function, embodied in most bilateral search models, is crucial to ensure the uniqueness of the unemployment rate along a steady state growth path. This paper explores whether this is an acceptable assumption by estimating individual re-employment probabilities on a sample of entrants into unemployment. This is done by applying hazard models to survey data on both completed and uncompleted unemployment durations. The hypothesis of constant returns to matching is not rejected, on the basis of the evidence that the job-finding hazard only depends on local labour market tightness, and it is independent of its size.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0406.

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Date of creation: Sep 1998
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Handle: RePEc:cep:cepdps:dp0406

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Cited by:
  1. Frosch, Katharina, 2006. "Reemployment rates over the life course: Is there still hope after late career job loss?," Thuenen-Series of Applied Economic Theory 64, University of Rostock, Institute of Economics.
  2. Sciulli, Dario & Menezes, Antonio & Vieira, José A. Cabral, 2007. "Unemployment Duration and Disability: Evidence from Portugal," IZA Discussion Papers 3028, Institute for the Study of Labor (IZA).
  3. Sabrina Di Addario, 2005. "Job Search in Thick Markets: Evidence from Italy," Economics Series Working Papers 235, University of Oxford, Department of Economics.
  4. Di Addario, Sabrina, 2011. "Job search in thick markets," Journal of Urban Economics, Elsevier, vol. 69(3), pages 303-318, May.
  5. Sunde, Uwe, 2002. "Unobserved Bilateral Search on the Labor Market: A Theory-Based Correction for a Common Flaw in Empirical Matching Studies," IZA Discussion Papers 520, Institute for the Study of Labor (IZA).
  6. Lorenzo Corsini, 2011. "On Wealth, Unemployment Benefits and Unemployment Duration: some Evidence from Italy," Discussion Papers 2011/119, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  7. Sorm, Vit & Terrell, Katherine, 2000. "Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic," IZA Discussion Papers 111, Institute for the Study of Labor (IZA).
  8. Sanna-Mari Ahtonen, 2004. "Matching across space: evidence from Finland," ERSA conference papers ersa04p205, European Regional Science Association.
  9. Bjornstad, Roger, 2006. "Learned helplessness, discouraged workers, and multiple unemployment equilibria," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(3), pages 458-475, June.
  10. Carolina Fugazza, 2012. "Employment Risk over the Life Cycle," Carlo Alberto Notebooks 280, Collegio Carlo Alberto.
  11. Roger Bjørnstad, 2001. "Learned Helplessness, Discouraged Workers, and Multiple Unemployment Equilibria in a Search Model," Discussion Papers 303, Research Department of Statistics Norway.
  12. Bruder, Jana & Frosch, Katharina, 2006. "Foreign nationality and age: A double drawback for reemployment in Germany?," Thuenen-Series of Applied Economic Theory 63, University of Rostock, Institute of Economics.
  13. Andrew Goodman-Bacon & Yukako Ono, 2007. "Who are temporary nurses?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 2-13.

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