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Underestimated or overestimated: matching function elasticities biased due to worker inflows and outflows

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  • Ewa Gałecka-Burdziak

Abstract

Matching function elasticities are biased, that is, underestimated or overestimated, if inflows and outflows of job seekers are omitted. I analyse mathematically the direction of this bias and estimate parameters for random, stock-flow and job queuing models, adjusted econometrically for the temporal aggregation bias in the data. I analyse various sets of endogenous and exogenous variables from registered unemployment data in Poland. Estimates show that unemployment affects matching more than discouragement, and that unemployment stock elasticity is underestimated if discouraged workers are neglected.

Suggested Citation

  • Ewa Gałecka-Burdziak, 2016. "Underestimated or overestimated: matching function elasticities biased due to worker inflows and outflows," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 47.
    • Handle: RePEc:eko:ekoeko:47_7
    DOI: 10.17451/eko/47/2016/229
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    References listed on IDEAS

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    1. Elzbieta Antczak & Ewa Galecka-Burdziak & Robert Pater, 2016. "Spatial Labour Market Matching," CERGE-EI Working Papers wp578, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
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    8. Gregg, Paul & Petrongolo, Barbara, 2005. "Stock-flow matching and the performance of the labor market," European Economic Review, Elsevier, vol. 49(8), pages 1987-2011, November.
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