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Empirical Matching Functions: Searchers, Vacancies, and (Un‐)biased Elasticities

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  • UWE SUNDE

Abstract

This paper shows that conventional empirical estimates of matching functions are systematically biased, because unobservable and endogenous search behaviour, such as on‐the‐job search by workers or the use of different search channels by firms, is neglected. I propose an approach for recovering unbiased elasticities under different scenarios of competition for workers and jobs without the need for constructing proxies for unobserved stocks of searchers and vacancies. Using German administrative data, I estimate the biases affecting conventional studies and derive bias‐corrected estimates of the matching elasticities under different scenarios.

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  • Uwe Sunde, 2007. "Empirical Matching Functions: Searchers, Vacancies, and (Un‐)biased Elasticities," Economica, London School of Economics and Political Science, vol. 74(295), pages 537-560, August.
  • Handle: RePEc:bla:econom:v:74:y:2007:i:295:p:537-560
    DOI: 10.1111/j.1468-0335.2006.00573.x
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    1. Juan J. Dolado & Marcel Jansen & Juan F. Jimeno, 2009. "On‐the‐Job Search in a Matching Model with Heterogeneous Jobs and Workers," Economic Journal, Royal Economic Society, vol. 119(534), pages 200-228, January.
    2. Coles, Melvyn G & Petrongolo, Barbara, 2002. "A Test Between Unemployment Theories Using Matching Data," CEPR Discussion Papers 3241, C.E.P.R. Discussion Papers.
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    1. repec:spo:wpmain:info:hdl:2441/4l136f59vb8mcalu5p6p5li007 is not listed on IDEAS
    2. Daniel Borowczyk-Martins & Grégory Jolivet & Fabien Postel-Vinay, 2013. "Accounting for Endogeneity in Matching Function Estimation," SciencePo Working papers hal-03473875, HAL.
    3. repec:hal:spmain:info:hdl:2441/4l136f59vb8mcalu5p6p5li007 is not listed on IDEAS
    4. Stops Michael & Mazzoni Thomas, 2010. "Matchingprozesse auf beruflichen Teilarbeitsmärkten / Job Matching on Occupational Labour Markets," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(3), pages 287-312, June.
    5. Jahn, Elke J. & Wagner, Thomas, 2008. "Do Targeted Hiring Subsidies and Profiling Techniques Reduce Unemployment?," IZA Discussion Papers 3768, Institute of Labor Economics (IZA).
    6. Andreas I Mueller & Damian Osterwalder & Josef Zweimüller & Andreas Kettemann, 2024. "Vacancy Durations and Entry Wages: Evidence from Linked Vacancy–Employer–Employee Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(3), pages 1807-1841.
    7. Harbo hansen, Niels-Jakob, 2019. "Measuring job openings: evidence from Swedish plant level data," Working Paper Series 2019:27, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Masaru Sasaki & Miki Kohara & Tomohiro Machikita, 2013. "Measuring Search Frictions Using Japanese Microdata," The Japanese Economic Review, Japanese Economic Association, vol. 64(4), pages 431-451, December.
    9. Daniel Borowczyk-Martins & Gregory Jolivet & Fabien Postel-Vinay, 2013. "Accounting For Endogeneity in Matching Function Estimation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(3), pages 440-451, July.
    10. Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2013. "The Establishment-Level Behavior of Vacancies and Hiring," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 581-622.
    11. Fahr René & Sunde Uwe, 2009. "Did the Hartz Reforms Speed-Up the Matching Process? A Macro- Evaluation Using Empirical Matching Functions," German Economic Review, De Gruyter, vol. 10(3), pages 284-316, August.
    12. Michael Stops, 2014. "Job matching across occupational labour markets," Oxford Economic Papers, Oxford University Press, vol. 66(4), pages 940-958.
    13. Simonetta Longhi, 2011. "On-The-Job Search: Amount, Regional, And Cyclical Variation. Evidence From Great Britain," ERSA conference papers ersa10p294, European Regional Science Association.
    14. Christian Welzel & Ronald Inglehart, 2013. "Evolution, empowerment and emancipation: How societies ascend the utility ladder of freedoms," HSE Working papers WP BRP 29/SOC/2013, National Research University Higher School of Economics.
    15. Bauer, Anja, 2013. "Mismatch unemployment : evidence from Germany 2000-2010," IAB-Discussion Paper 201310, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    16. Wozniak, Marcin, 2021. "Spatial matching on the urban labor market: estimates with unique micro data," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55(55), pages 1-.11.
    17. Lee, Kangoh, 2022. "Unemployment insurance, mobile capital, output, and distributive effects," Economic Modelling, Elsevier, vol. 115(C).
    18. Sabine Klinger & Thomas Rothe, 2012. "The Impact of Labour Market Reforms and Economic Performance on the Matching of the Short‐term and the Long‐term Unemployed," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(1), pages 90-114, February.
    19. Postel-Vinay, Fabien & Jolivet, Grégory & Borowczyk-Martins, Daniel, 2011. "Accounting For Endogenous Search Behavior in Matching Function Estimation," CEPR Discussion Papers 8471, C.E.P.R. Discussion Papers.
    20. Wozniak, Marcin, 2021. "Spatial matching on the urban labor market: estimates with unique micro data," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-11.
    21. repec:iab:iabjlr:v:55:i::p:art.11 is not listed on IDEAS
    22. Marcin Wozniak, 2021. "Spatial matching on the urban labor market: estimates with unique micro data," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-17, December.
    23. Michael Stops, 2011. "Job Matching on non-separated Occupational Labour Markets," ERSA conference papers ersa11p372, European Regional Science Association.
    24. Yang Liu, 2011. "Labor market matching with heterogeneous job seekers in China," Economics Bulletin, AccessEcon, vol. 31(3), pages 1980-1992.

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