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Regional Dependencies in Job Creation: An Efficiency Analysis for Western Germany

Author

Listed:
  • Fahr, René

    (University of Paderborn)

  • Sunde, Uwe

    (University of Munich)

Abstract

This paper investigates the efficiency of the matching process between job seekers and vacancy posting firms in West-Germany, using variation across labor market regions and across time. The results of a stochastic frontier analysis shed new light on extent and regional differences of search frictions, on potential determinants of frictional inefficiencies and on the consequences of German reunification for the matching process. The paper also presents novel evidence on the complex interactions between spatial contingencies among regional labor markets: matching efficiency decreases with spatial autocorrelation in hiring, implying indirect evidence for crowding externalities.

Suggested Citation

  • Fahr, René & Sunde, Uwe, 2005. "Regional Dependencies in Job Creation: An Efficiency Analysis for Western Germany," IZA Discussion Papers 1660, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1660
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    References listed on IDEAS

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    12. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    spatial autocorrelation; regional unemployment; stochastic frontier; matching function;
    All these keywords.

    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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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