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Does population density matter in the matching process of heterogeneous job seekers and vacancies?

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  • Jukka Petteri Lahtonen

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  • Sanna-Mari Hynninen

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    Abstract

    This paper analyses the matching process of job seekers and vacant jobs in local labour markets. We investigate how the education level of job seekers and education requirements of vacancies match together in the areas of Local Labour Offices (LLOs), and what is the role of population density in that process. The data set is temporally, spatially, by education level of job seekers and by education requirements of vacancies highly disaggregated monthly data from 146 LLOs in Finland over 14 years. We find differences in the abilities of local labour markets to form successful matches at given levels of inputs. These differences can be explained partly by population density. We control for the heterogeneity of both sides of the labour market in our models allowing different employability for job seekers with different education levels and different filling rates for vacancies with different education requirements. Our results suggest that education increases successful matches only in markets with certain characteristics.

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    Bibliographic Info

    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p438.

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    Date of creation: Aug 2005
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    Handle: RePEc:wiw:wiwrsa:ersa05p438

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    1. van Ours, Jan C., 1995. "An empirical note on employed and unemployed job search," Economics Letters, Elsevier, Elsevier, vol. 49(4), pages 447-452, October.
    2. Howard J. Wall & Gylfi Zoega, 2001. "The British Beveridge curve: a tale of ten regions," Working Papers, Federal Reserve Bank of St. Louis 2001-007, Federal Reserve Bank of St. Louis.
    3. Wahba, Jackline & Zenou, Yves, 2004. "Density, Social Networks and Job Search Methods: Theory and Application to Egypt," Working Paper Series, Research Institute of Industrial Economics 629, Research Institute of Industrial Economics.
    4. Coles, Melvyn G & Smith, Eric, 1996. "Cross-Section Estimation of the Matching Function: Evidence from England and Wales," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 63(252), pages 589-97, November.
    5. Burgess, Simon & Turon, Hélène, 2003. "Unemployment Equilibrium and On-the-Job Search," IZA Discussion Papers 753, Institute for the Study of Labor (IZA).
    6. Fahr, René & Sunde, Uwe, 2001. "Disaggregate Matching Functions," IZA Discussion Papers 335, Institute for the Study of Labor (IZA).
    7. Hoyt Bleakley & Jeffrey C. Fuhrer, 1997. "Shifts in the Beveridge Curve, job matching, and labor market dynamics," New England Economic Review, Federal Reserve Bank of Boston, Federal Reserve Bank of Boston, issue Sep, pages 3-19.
    8. Broersma, L. & Ours, J.C. van, 1998. "Job Searchers, Job Matches and the Elasticity of Matching," Discussion Paper, Tilburg University, Center for Economic Research 1998-72, Tilburg University, Center for Economic Research.
    9. Patricia M. Anderson & Simon M. Burgess, 1995. "Empirical Matching Functions: Estimation and Interpretation Using Disaggregate Data," NBER Working Papers 5001, National Bureau of Economic Research, Inc.
    10. 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, Royal Economic Society, vol. 103(420), pages 1190-204, September.
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