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Non-uniformity of job-matching in a transition economy: A nonparametric analysis for the Czech Republic

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  • Profit, Stefan
  • Sperlich, Stefan

Abstract

We consider problems in modelling job-matching in the Czech Republic during the transition to a market economy. Special interest is devoted to functional form considerations and the analysis of returns to scale of the matching function. This explorative study aims to shed some light into the black-box of the matching technology by applying nonparametric estimation techniques which relax distributional assumptions. Nonparametric additive modelling enables us to evaluate the matching process locally for each combination of the underlying matching factors, rather than being restricted to global parameters. We apply these techniques to a rich panel of monthly observations of unemployment vacancies and unemployment-to-job exits in all 76 labor market districts in the Czech Republic between January 1992 and September 1996, and find non-linearities in the partial adjustment process as well as a partially negative coefficient of unemployment outows with respect to vacancies in some years. Moreover, we find locally increasing returns to scale in job-matching, which may be responsible for multiple equilibrium unemployment rates in the Czech Republic during the transformation process. --

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Bibliographic Info

Paper provided by Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes in its series SFB 373 Discussion Papers with number 1998,15.

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Date of creation: 1998
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Handle: RePEc:zbw:sfb373:199815

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Keywords: marginal integration; Job-matching; returns to scale; nonparametric analysis; testing additivity; Czech Republic;

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  1. Burda, Michael C. & Profit, Stefan, 1996. "Matching across space: Evidence on mobility in the Czech Republic," Labour Economics, Elsevier, vol. 3(3), pages 255-278, October.
  2. Simon Burgess & Stefan Profit, 2001. "Externalities in the Matching of Workers and Firms in Britain," CEP Discussion Papers dp0490, Centre for Economic Performance, LSE.
  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.
  4. repec:wop:humbsf:1998-19 is not listed on IDEAS
  5. Ours, J. C. van & Burdett, K. & Coles, M., 1994. "Temporal Aggregation Bias in Stock-Flow Models," Open Access publications from Tilburg University urn:nbn:nl:ui:12-153334, Tilburg University.
  6. Oliver Linton & E. Mammen & J. Nielsen, 1997. "The Existence and Asymptotic Properties of a Backfitting Projection Algorithm Under Weak Conditions," Cowles Foundation Discussion Papers 1160, Cowles Foundation for Research in Economics, Yale University.
  7. Boeri, Tito & Burda, Michael C, 1995. "Active Labour Market Policies, Job Matching and the Czech Miracle," CEPR Discussion Papers 1302, C.E.P.R. Discussion Papers.
  8. Dale T. Mortensen & Christopher A. Pissarides, 1993. "Job Creation and Job Destruction in the Theory of Unemployment," CEP Discussion Papers dp0110, Centre for Economic Performance, LSE.
  9. Coles, Melvyn G & Smith, Eric, 1998. "Marketplaces and Matching," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 239-54, February.
  10. Sperlich, Stefan & Tjøstheim, Dag & Yang, Lijian, 1998. "Nonparametric estimation and testing of interaction in additive models," SFB 373 Discussion Papers 1998,14, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  11. Simon Baker & Seamus Hogan & Christopher Ragan, 1996. "Is There Compelling Evidence against Increasing Returns to Matching in the Labour Market?," Canadian Journal of Economics, Canadian Economics Association, vol. 29(4), pages 976-93, November.
  12. Storer, P, 1994. "Unemployment Dynamics and Labour Market Tightness: An Empirical Evaluation of Matching Function Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(4), pages 389-419, Oct.-Dec..
  13. Pissarides, Christopher A, 1984. "Search Intensity, Job Advertising, and Efficiency," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 128-43, January.
  14. Denny, Michael & Fuss, Melvyn A, 1977. "The Use of Approximation Analysis to Test for Separability and the Existence of Consistent Aggregates," American Economic Review, American Economic Association, vol. 67(3), pages 404-18, June.
  15. Weder, Mark, 1998. "Fickle Consumers, Durable Goods, and Business Cycles," Journal of Economic Theory, Elsevier, vol. 81(1), pages 37-57, July.
  16. Paul Gregg & Barbara Petrongolo, 1997. "Random or Non-Random matching? Implications for the use of the UV 234 curve as a measure of matching effectiveness," CEP Discussion Papers dp0348, Centre for Economic Performance, LSE.
  17. Warren, Ronald Jr., 1996. "Returns to scale in a matching model of the labor market," Economics Letters, Elsevier, vol. 50(1), pages 135-142, January.
  18. Burda, Michael C, 1993. "Modelling Exits from Unemployment in Eastern Germany: A Matching Function Approach," CEPR Discussion Papers 800, C.E.P.R. Discussion Papers.
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