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Estimating Regional Matching Efficiency in the Indian Labor Market: State-Level Panel Data for 1999-2013

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  • Woong Lee

    (Korea Institute for International Economic Policy)

Abstract

We analyze state-level matching efficiency in the Indian labor market using stochastic frontier analysis. The key contribution of this research is the estimation of matching efficiency at the state level because the estimates can be used for a state-level measure of labor market conditions. Next, we explore the relation between estimated matching efficiency and population density (or labor market flexibility). The results show that matching efficiency is heterogeneous across states with considerable variation in accordance with the regional diversity in India. However, we find that there is no relationship between the estimated matching efficiency and the well-known labor market conditions of interest. The correlations are either close to zero or not statistically significant, suggesting that other regional diversity may affect matching efficiency in India.

Suggested Citation

  • Woong Lee, 2015. "Estimating Regional Matching Efficiency in the Indian Labor Market: State-Level Panel Data for 1999-2013," Working Papers 15-3, Korea Institute for International Economic Policy.
    • Handle: RePEc:ris:kiepwp:2015_003
    DOI: 10.2139/ssrn.2773983
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    References listed on IDEAS

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    4. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    5. Petia Topalova, 2007. "Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts," NBER Chapters, in: Globalization and Poverty, pages 291-336, National Bureau of Economic Research, Inc.
    6. Gupta, Poonam & Hasan, Rana & Kumar, Utsav, 2009. "Big Reforms but Small Payoffs: Explaining the Weak Record of Growth and Employment in Indian Manufacturing," MPRA Paper 13496, University Library of Munich, Germany.
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    Keywords

    Matching Function; Matching Efficiency; Indian Labor Market; Stochastic;
    All these keywords.

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