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Empirical Matching Functions: Estimation and Interpretation Using Disaggregate Data

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Author Info
Patricia M. Anderson
Simon M. Burgess

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Abstract

In this paper, we estimate matching functions using disaggregate data. We find strong support for the matching approach, with most specifications implying slightly increasing returns to scale. This finding does not appear to arise from our inclusion of additional controls or from the level of disaggregation, and so we conclude that earlier findings of constant returns in the US may be due to the various approximations needed to construct an aggregate time series. We also find evidence of endogenous job competition between the employed and nonemployed, so that the estimated parameters from a matching function cannot be interpreted as structural parameters.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5001.

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Date of creation: Jan 1995
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Handle: RePEc:nbr:nberwo:5001

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J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies

References listed on IDEAS
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  1. Peter A. Diamond & Eric Maskin, 1979. "An Equilibrium Analysis of Search and Breach of Contract, I: Steady States," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 282-316, Spring. [Downloadable!] (restricted)
  2. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-80, October. [Downloadable!] (restricted)
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  3. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-94, October. [Downloadable!] (restricted)
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  4. Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Blackwell Publishing, vol. 57(2), pages 279-98, April. [Downloadable!] (restricted)
  5. Dale T. Mortensen, 1979. "The Matching Process as a Non-Cooperative/Bargaining Game," Discussion Papers 384, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  6. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-90, September. [Downloadable!] (restricted)
  7. 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. [Downloadable!] (restricted)
  8. Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1989-1), pages 1-76. [Downloadable!]
  9. Blank, Rebecca M & Card, David E, 1991. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1157-89, November. [Downloadable!] (restricted)
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  10. Gottschalk, Peter & Maloney, Tim, 1985. "Involuntary Terminations, Unemployment, and Job Matching: A Test of Job Search Theory," Journal of Labor Economics, University of Chicago Press, vol. 3(2), pages 109-23, April. [Downloadable!] (restricted)
  11. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-55, June. [Downloadable!] (restricted)
  12. Dale Mortensen, 1984. "Job Search and Labor Market Analysis," Discussion Papers 594, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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Cited by:
(explanations, 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.)

  1. Aki Kangasharju & Jaakko Pehkonen & Sari Pekkala, 2003. "Matching in thin labour markets: panel data evidence from Finland, 1991-2002," ERSA conference papers ersa03p208, European Regional Science Association. [Downloadable!]
  2. Konstantinos Eleftheriou, 2008. "Matching, Specialties and Wage Inequality," Economics Bulletin, Economics Bulletin, vol. 10(11), pages 1-12. [Downloadable!]
  3. Burgess, Simon & Turon, Hélène, 2000. "Unemployment Dynamics, Duration and Equilibrium: Evidence from Britain," CEPR Discussion Papers 2490, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Monfort, Philippe & Ottaviano, Gianmarco Ireo Paolo, 2002. "Spatial Mismatch and Skill Accumulation," CEPR Discussion Papers 3324, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  5. Eran Yashiv, 2000. "The Determinants of Equilibrium Unemployment," American Economic Review, American Economic Association, vol. 90(5), pages 1297-1322, December. [Downloadable!] (restricted)
    Other versions:
  6. Julián Durán Peralta & Jhon James Mora Rodríguez, 2006. "Una aproximación empírica a la relación entre el desempleo y las vacantes para Popayán, 2001-2005," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 65, pages 209-220, Julio-Dic. [Downloadable!]
  7. Martin Robson, 2006. "Sectoral shifts, employment specialization and the efficiency of matching: An analysis using UK regional data," Regional Studies, Taylor and Francis Journals, vol. 40(7), pages 743-754, October. [Downloadable!] (restricted)
  8. Jukka Petteri Lahtonen & Sanna-Mari Hynninen, 2005. "Does population density matter in the matching process of heterogeneous job seekers and vacancies?," ERSA conference papers ersa05p438, European Regional Science Association. [Downloadable!]
  9. M. C. Burda & S. Profit, . "Matching Across Space: Evidence on Mobility in the Czech Republik," Sonderforschungsbereich 373 1996-11, Humboldt Universitaet Berlin.
    Other versions:
  10. Stefan Profit, 1998. "Twin peaks in regional unemployment and returns to scale in job-matching in the Czech Republic," ERSA conference papers ersa98p42, European Regional Science Association. [Downloadable!]
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