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Job search and hiring in local labor markets: Spillovers in regional matching functions

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  • Haller, Peter
  • Heuermann, Daniel F.

Abstract

In this paper we take a fresh look at the job matching process within local labor markets in Germany. Drawing on smaller geographic units than the previous literature, we estimate regional matching functions on NUTS 3 level for the years 2000 to 2010. The elasticity between matches and unemployment ranges between 0.4 and 0.5 with 75% of this effect being driven by the impact that unemployment has on matches in neighboring regions. The effect of vacancies on matches is substantially smaller but also robustly positive. Bayesian model comparison tests suggest that spillovers from unemployment and vacancies are confined to local labor markets, which are best approximated by geographical distance rather than by present or past infrastructure or commuter numbers. Spillovers from unemployment arise exclusively after a series of major labor market reforms (‘Hartz Reforms') have been implemented between 2003 and 2005, indicating that the reforms have contributed to an increased spatial mobility of the unemployed.

Suggested Citation

  • Haller, Peter & Heuermann, Daniel F., 2016. "Job search and hiring in local labor markets: Spillovers in regional matching functions," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 125-138.
  • Handle: RePEc:eee:regeco:v:60:y:2016:i:c:p:125-138
    DOI: 10.1016/j.regsciurbeco.2016.06.007
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    Cited by:

    1. Fedorets, Alexandra & Stops, Michael & Lottmann, Franziska, 2017. "Job matching on connected regional and occupational labor markets," IAB Discussion Paper 201735, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Daniel F. Heuermann & Johannes F. Schmieder, 2018. "The Effect of Infrastructure on Worker Mobility: Evidence from High-Speed Rail Expansion in Germany," NBER Working Papers 24507, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Local labor markets; Matching function; Commuting; Transport infrastructure;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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