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Accounting For Endogenous Search Behavior in Matching Function Estimation


  • Borowczyk-Martins, Daniel

    () (Copenhagen Business School)

  • Jolivet, Grégory

    () (University of Bristol)

  • Postel-Vinay, Fabien

    () (University College London)


We show that equilibrium matching models imply that standard estimates of the matching function elasticities are exposed to an endogeneity bias, which arises from the search behavior of agents on either side of the market. We offer an estimation method which, under certain assumptions, is immune from that bias. Application of our method to the estimation of a basic version of the matching function using aggregate U.S. data from the Job Openings and Labor Turnover Survey (JOLTS) suggests that the bias is quantitatively important.

Suggested Citation

  • Borowczyk-Martins, Daniel & Jolivet, Grégory & Postel-Vinay, Fabien, 2011. "Accounting For Endogenous Search Behavior in Matching Function Estimation," IZA Discussion Papers 5807, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5807

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    References listed on IDEAS

    1. Fahr, Rene & Sunde, Uwe, 2005. "Job and vacancy competition in empirical matching functions," Labour Economics, Elsevier, vol. 12(6), pages 773-780, December.
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    8. Berman, Eli, 1997. "Help Wanted, Job Needed: Estimates of a Matching Function from Employment Service Data," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 251-292, January.
    9. Regis Barnichon & Andrew Figura, 2011. "What drives matching efficiency? a tale of composition and dispersion," Finance and Economics Discussion Series 2011-10, Board of Governors of the Federal Reserve System (U.S.).
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    12. Éva Nagypál, 2009. "What Can We Learn About Firm Recruitment from the Job Openings and Labor Turnover Survey?," NBER Chapters,in: Producer Dynamics: New Evidence from Micro Data, pages 109-123 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Bart Hobijn & Aysegul Sahin, 2013. "Beveridge Curve Shifts across Countries since the Great Recession," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(4), pages 566-600, December.
    2. Francesco Furlanetto & Nicolas Groshenny, 2012. "Matching efficiency and business cycle fluctuations," Working Paper 2012/07, Norges Bank.
    3. Rose, Giuseppe, 2013. "Endogenous ranking in a two-sector urn-ball matching process," Economics Discussion Papers 2013-40, Kiel Institute for the World Economy (IfW).

    More about this item


    unemployment; matching function estimation; vacancies; job finding;

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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