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Measuring Job-Finding Rates and Matching Efficiency with Heterogeneous Jobseekers

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  • Robert E. Hall
  • Sam Schulhofer-Wohl

Abstract

Matching efficiency is the productivity of the process for matching jobseekers to available jobs. Job-finding is the output; vacant jobs and active jobseekers are the inputs. Measurement of matching efficiency follows the same principles as measuring a Hicks-neutral index of productivity of production. We develop a framework for measuring matching productivity when the population of jobseekers is heterogeneous. The efficiency index for each type of jobseeker is the monthly job-finding rate for the type adjusted for the overall tightness of the labor market. We find that overall matching efficiency declined over the period, at just below its earlier downward trend. We develop a new approach to measuring matching rates that avoids counting short-duration jobs as successes. And we show that the outward shift in the Beveridge curve in the post-crisis period is the result of pre-crisis trends, not a downward shift in matching efficiency attributable to the crisis.

Suggested Citation

  • Robert E. Hall & Sam Schulhofer-Wohl, 2015. "Measuring Job-Finding Rates and Matching Efficiency with Heterogeneous Jobseekers," Working Papers 721, Federal Reserve Bank of Minneapolis, revised 06 Feb 2015.
  • Handle: RePEc:fip:fedmwp:721
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    Cited by:

    1. Erin Wolcott, 2018. "Employment Inequality: Why Do the Low-Skilled Work Less Now?," 2018 Meeting Papers 487, Society for Economic Dynamics.
    2. Fabian Lange & Marianna Kudlyak, 2014. "Measuring Heterogeneity in Job Finding Rates Among the Nonemployed Using Labor Force Status Histories," Working Paper 14-18, Federal Reserve Bank of Richmond, revised 04 Dec 2014.
    3. Denzer, Manuel & Schank, Thorsten & Upward, Richard, 2018. "Does the Internet Increase the Job Finding Rate? Evidence from a Period of Internet Expansion," IZA Discussion Papers 11764, Institute of Labor Economics (IZA).
    4. Alessandro Gavazza & Simon Mongey & Giovanni L. Violante, 2018. "Aggregate Recruiting Intensity," American Economic Review, American Economic Association, vol. 108(8), pages 2088-2127, August.
    5. Pizzinelli, Carlo & Speigner, Bradley, 2017. "Matching efficiency and labour market heterogeneity in the United Kingdom," Bank of England working papers 667, Bank of England.
    6. Modestino, Alicia Sasser & Shoag, Daniel & Ballance, Joshua, 2016. "Downskilling: changes in employer skill requirements over the business cycle," Labour Economics, Elsevier, vol. 41(C), pages 333-347.
    7. David W. Berger & Konstantin Milbradt & Fabrice Tourre & Joseph Vavra, 2018. "Mortgage Prepayment and Path-Dependent Effects of Monetary Policy," NBER Working Papers 25157, National Bureau of Economic Research, Inc.
    8. Mongey, Simon & Violante, Giovanni L., 2019. "Macro Recruiting Intensity from Micro Data," CEPR Discussion Papers 14004, C.E.P.R. Discussion Papers.
    9. Hie Joo Ahn, 2016. "Heterogeneity in the Dynamics of Disaggregate Unemployment," Finance and Economics Discussion Series 2016-063, Board of Governors of the Federal Reserve System (U.S.), revised 29 Jul 2016.
    10. Sterk, Vincent, 2016. "The dark corners of the labor market," LSE Research Online Documents on Economics 86244, London School of Economics and Political Science, LSE Library.
    11. Hie Ahn & James Hamilton, 2016. "Heterogeneity and Unemployment Dynamics," Working Papers id:11130, eSocialSciences.
    12. Kalee Burns & Julie L. Hotchkiss, 2019. "Migration Constraints and Disparate Responses to Changing Job Opportunities," FRB Atlanta Working Paper 2019-1, Federal Reserve Bank of Atlanta, revised 13 May 2019.
    13. Marianna Kudlyak & Andreas Hornstein, 2015. "Estimating Matching Efficiency with Variable Search Effort," Working Paper Series 2016-24, Federal Reserve Bank of San Francisco, revised 21 May 2015.
    14. William D. Craighead, 2019. "Hysteresis In A New Keynesian Model," Economic Inquiry, Western Economic Association International, vol. 57(2), pages 1082-1097, April.
    15. Robert E. Hall, 2015. "Comment on "Declining Desire to Work and Downward Trends in Unemployment and Participation"," NBER Chapters, in: NBER Macroeconomics Annual 2015, Volume 30, pages 502-508, National Bureau of Economic Research, Inc.
    16. Katharine G. Abraham & Melissa S. Kearney, 2018. "Explaining the Decline in the U.S. Employment-to-Population Ratio: a Review of the Evidence," NBER Working Papers 24333, National Bureau of Economic Research, Inc.
    17. Nika Lazaryan & Thomas A. Lubik, 2017. "Global Dynamics in a Search and Matching Model of the Labor Market," Working Paper 17-12, Federal Reserve Bank of Richmond, revised 20 Oct 2017.
    18. Michael J. Pries & Richard Rogerson, 2019. "Declining Worker Turnover: the Role of Short Duration Employment Spells," NBER Working Papers 26019, National Bureau of Economic Research, Inc.
    19. Hertweck, Matthias S. & Lewis, Vivien & Villa, Stefania, 2019. "Going the extra mile: Effort by workers and job-seekers," Discussion Papers 29/2019, Deutsche Bundesbank.
    20. Claudia Macaluso, 2017. "Skill Remoteness and Post-layoff Labor Market Outcomes," 2017 Meeting Papers 569, Society for Economic Dynamics.
    21. Hall, R.E., 2016. "Macroeconomics of Persistent Slumps," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2131-2181, Elsevier.
    22. Vincent Sterk, 2016. "The Dark Corners of the Labor Market," Discussion Papers 1603, Centre for Macroeconomics (CFM).
    23. Robert E. Hall, 2016. "Comment," NBER Macroeconomics Annual, University of Chicago Press, vol. 30(1), pages 502-508.
    24. 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.
    25. Eliana Viviano & Andrea Brandolini, 2018. "Measuring employment and unemployment," IZA World of Labor, Institute of Labor Economics (IZA), pages 445-445, August.

    More about this item

    Keywords

    Job-finding rates; Beveridge curve; Matching efficiency;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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