Regional Matching Frictions and Aggregate Unemployment
AbstractThis study demonstrates that a stochastic frontier approach applied to regional level data offers a convenient and interesting method to examine how regional differences in matching efficiency and structural factors contribute to aggregate unemployment. The study reveals notable and temporally stable differences in matching efficiency across travel-to-work areas in Finland. If all areas were as efficient as the most efficient one, the number of hirings would increase by about 40 per cent. This would reduce the aggregate unemployment rate from the current 8.5 per cent level to 6.0 per cent. If all the areas shared the same structural characteristics as the most favourable area, the aggregate unemployment rate would drop to 7.1 per cent.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 383.
Date of creation: 03 Mar 2006
Date of revision:
Other versions of this item:
- Sanna-Mari Hynninen & Aki Kangasharju & Jaakko Pehkonen, 2006. "Regional Matching Frictions and Aggregate Unemployment," ERSA conference papers ersa06p416, European Regional Science Association.
- NEP-ALL-2006-07-11 (All new papers)
- NEP-GEO-2006-07-15 (Economic Geography)
- NEP-LAB-2006-07-29 (Labour Economics)
- NEP-URE-2006-07-13 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Burgess, Simon & Turon, Hélène, 2003.
"Unemployment Equilibrium and On-the-Job Search,"
IZA Discussion Papers
753, Institute for the Study of Labor (IZA).
- Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1371-91, November.
- Aki Kangasharju & Jaakko Pehkonen & Sari Pekkala, 2005. "Returns to scale in a matching model: evidence from disaggregated panel data," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 115-118.
- Layard, Richard & Bean, Charles, 1989.
" Why Does Unemployment Persist?,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 91(2), pages 371-96.
- Blanchard, J.O., 1989.
"The Aggregate Matching Function,"
538, Massachusetts Institute of Technology (MIT), Department of Economics.
- Karsten Albæk & Henrik Hansen, .
"The Rise in Danish Unemployment: Reallocation or Mismatch?,"
CAM Working Papers
2004-13, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
- Karsten Albæk & Henrik Hansen, 2004. "The Rise in Danish Unemployment: Reallocation or Mismatch?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(4), pages 515-536, 09.
- Karsten Albæk & Henrik Hansen, 1999. "The Rise in Danish Unemployment: Reallocation or Mismatch?," Discussion Papers 99-15, University of Copenhagen. Department of Economics.
- Holden, Steinar & Nymoen, Ragnar, 2002. " Measuring Structural Unemployment: NAWRU Estimates in the Nordic Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(1), pages 87-104.
- Patricia M. Anderson & Simon M. Burgess, 2000. "Empirical Matching Functions: Estimation and Interpretation Using State-Level Data," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 93-102, February.
- Barbara Petrongolo & Christopher Pissarides, 2000.
"Looking into the black box: a survey of the matching function,"
LSE Research Online Documents on Economics
2122, London School of Economics and Political Science, LSE Library.
- 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.
- Barbara Petrongolo & Christopher A. Pissarides, 2000. "Looking Into the Black Box: A Survey of the Matching Function," CEP Discussion Papers dp0470, Centre for Economic Performance, LSE.
- Petrongolo, Barbara & Pissarides, Christopher, 2000. "Looking Into The Black Box: A Survey Of The Matching Function," CEPR Discussion Papers 2409, C.E.P.R. Discussion Papers.
- Burdett, Kenneth & Coles, Melvyn G & van Ours, Jan C, 1994.
"Temporal Aggregation Bias in Stock-Flow Models,"
CEPR Discussion Papers
967, C.E.P.R. Discussion Papers.
- Fahr, René & Sunde, Uwe, 2005.
"Regional Dependencies in Job Creation: An Efficiency Analysis for Western Germany,"
IZA Discussion Papers
1660, Institute for the Study of Labor (IZA).
- 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.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
- Aomar IBOURK & Béatrice MAILLARD & Serge PERELMAN & Henri R. SNEESSENS, 2001. "Aggregate Matching Efficiency : A Stochastic Production Frontier Approach, France 1990-1994," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001034, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
- Pekka Ilmakunnas & Hanna Pesola, 2003. "Regional Labour Market Matching Functions and Efficiency Analysis," LABOUR, CEIS, vol. 17(3), pages 413-437, 09.
- Burgess, Simon M, 1993. "A Model of Competition between Unemployed and Employed Job Searchers: An Application to the Unemployment Outflow Rate in Britain," Economic Journal, Royal Economic Society, vol. 103(420), pages 1190-204, September.
- Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
- Abid, Anis Bou & Drine, Imed, 2011.
"Efficiency frontier and matching process on the labour market: Evidence from Tunisia,"
Elsevier, vol. 28(3), pages 1131-1139, May.
- Anis Bou Abid & Imed Drine, 2010. "Efficiency Frontier and Matching Process on the Labour Market: Evidence from Tunisia," Working Paper Series wp2010-123, World Institute for Development Economic Research (UNU-WIDER).
- Drine, Imed & Bou Abid, Anis, 2010. "Efficiency frontier and matching process on the labor market: Evidence from Tunisia," MPRA Paper 21994, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anita Niskanen).
If references are entirely missing, you can add them using this form.