The Determinants of Hiring in Local Labor Markets: The Role of Demand and Supply Factors
This paper studies the determinants of hiring. We use the search-matching model with imperfect competition in the product market from Carlsson, Eriksson and Gottfries (2011) to derive an equation for total hiring in a local labor market, and estimate it on Swedish panel data. When product markets are imperfectly competitive, product demand shocks have a direct effect on employment. Our results show that product demand is important for hiring. Moreover, we show that conventional measures of vacancies do not fully capture the effect of product demand on hiring. Finally, we show that the number of unemployed workers has a positive effect on hiring as predicted by search-matching models.
|Date of creation:||21 Dec 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden|
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christiano, Lawrence J. & Trabandt, Mathias & Walentin, Karl, 2007.
"Introducing Financial Frictions and Unemployment into a Small Open Economy Model,"
Working Paper Series
214, Sveriges Riksbank (Central Bank of Sweden), revised 01 Jun 2011.
- Christiano, Lawrence J. & Trabandt, Mathias & Walentin, Karl, 2011. "Introducing financial frictions and unemployment into a small open economy model," Journal of Economic Dynamics and Control, Elsevier, vol. 35(12), pages 1999-2041.
- Lawrence J. Christiano & Mathias Trabandt & Karl Walentin, 2010. "Introducing financial frictions and unemployment into a small open economy model," FRB Atlanta CQER Working Paper 2010-04, Federal Reserve Bank of Atlanta.
- Mathias Trabandt & Karl Walentin & Lawrence J. Christiano, 2008. "Introducing Financial Frictions and Unemployment into a Small Open Economy Model," 2008 Meeting Papers 423, Society for Economic Dynamics.
- Yashiv, E., 1999.
"The Determinants of Equilibrium Unemployment,"
36-99, Tel Aviv.
- Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
- Coles, Melvyn G & Smith, Eric, 1994.
"Cross-Section Estimation of the Matching Function: Evidence from England and Wales,"
CEPR Discussion Papers
966, C.E.P.R. Discussion Papers.
- Coles, Melvyn G & Smith, Eric, 1996. "Cross-Section Estimation of the Matching Function: Evidence from England and Wales," Economica, London School of Economics and Political Science, vol. 63(252), pages 589-97, November.
- Pascal Michaillat, 2012.
"Do Matching Frictions Explain Unemployment? Not in Bad Times,"
American Economic Review,
American Economic Association, vol. 102(4), pages 1721-50, June.
- Pascal Michaillat, 2010. "Do Matching Frictions Explain Unemployment? Not in Bad Times," CEP Discussion Papers dp1024, Centre for Economic Performance, LSE.
- Mikael Carlsson & Stefan Eriksson & Nils Gottfries, 2013. "Product market imperfections and employment dynamics," Oxford Economic Papers, Oxford University Press, vol. 65(2), pages 447-470, April.
- R J Bennett & R R Pinto, 1994. "The Hiring Function in Local Labour Markets in Britain," Environment and Planning A, SAGE Publishing, vol. 26(12), pages 1957-1974, December.
- Forslund, Anders & Johansson, Kerstin, 2007. "Random and stock-flow models of labour market matching - Swedish evidence," Working Paper Series 2007:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
When requesting a correction, please mention this item's handle: RePEc:hhs:uunewp:2011_019. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katarina Grönvall)
If references are entirely missing, you can add them using this form.