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Labour market status of job seekers in regional matching processes

  • Sanna-Mari Hynninen

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    This study examines the matching aspects of local labour markets focusing on the status of job seekers in the matching process, on spatial autocorrelation in labour market conditions of local labour markets, and on differences in matching processes between areas with permanently deviating unemployment rates. The data set is temporally, spatially, and by labour market positions of job seekers highly disaggregate monthly data from 171 Local Labour Offices (LLOs) in Finland over 12 years. According to the results, an increase in the share of long-term unemployed job seekers decreases matches, and an increase in the share of job seekers out of labour force increases successful matches in local labour markets. The matching process does not work in the same way in all areas, but on the contrary its functioning is dependent on the unemployment conditions. Effects of increases in the number of inputs on successful matches depend on the proportional share of that input in the area as well as on the composition of the stock of job seekers. The results also indicate the labour market conditions and matching processes across neighbouring LLOs being spatially autocorrelated.

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    File URL: http://www-sre.wu-wien.ac.at/ersa/ersaconfs/ersa05/papers/499.pdf
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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p499.

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    Date of creation: Aug 2005
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    Handle: RePEc:wiw:wiwrsa:ersa05p499
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    1. Pissarides, Christopher A, 1994. "Search Unemployment with On-the-Job Search," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 457-75, July.
    2. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    3. Broersma, L. & van Ours, J.C., 1998. "Job Searchers, Job Matches and the Elasticity of Matching," Discussion Paper 1998-72, Tilburg University, Center for Economic Research.
    4. Layard, R. & Bean, C., 1988. "Why Does Unemployment Persist?," Papers 321, London School of Economics - Centre for Labour Economics.
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    7. Olivier Jean Blanchard & Peter Diamond, 1990. "Ranking, Unemployment Duration, and Wages," NBER Working Papers 3387, National Bureau of Economic Research, Inc.
    8. van Ours, J.C. & Broersma, L., 1999. "Job searchers, job matches and the elasticity of matching," Other publications TiSEM c199f354-b73c-49b6-84f6-e, Tilburg University, School of Economics and Management.
    9. van Ours, J.C. & Lindeboom, M. & Renes, G., 1994. "Matching Employers and Workers : an Empirical Analysis on the Effectiveness of Search," Other publications TiSEM 3ada67c1-145c-42d0-8726-f, Tilburg University, School of Economics and Management.
    10. Burgess, Simon M. & Profit, Stefan, 1998. "Externalities in the matching of workers and firms in Britain," SFB 373 Discussion Papers 1998,19, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    11. Turon, Helene & Simon Burgess, 2003. "Unemployment equilibrium and on-the-job search," Royal Economic Society Annual Conference 2003 208, Royal Economic Society.
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    13. Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1371-91, November.
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    15. Patricia M. Anderson & Simon M. Burgess, 2000. "Empirical Matching Functions: Estimation and Interpretation Using State-Level Data," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 93-102, February.
    16. Budd, Alan & Levine, Paul & Smith, Peter, 1988. "Unemployment, Vacancies and the Long-term Unemployed," Economic Journal, Royal Economic Society, vol. 98(393), pages 1071-91, December.
    17. Pekka Ilmakunnas & Hanna Pesola, 2003. "Regional Labour Market Matching Functions and Efficiency Analysis," LABOUR, CEIS, vol. 17(3), pages 413-437, 09.
    18. Aki Kangasharju & Jaakko Pehkonen & Sari Pekkala, 2005. "Returns to scale in a matching model: evidence from disaggregated panel data," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 115-118.
    19. Lourens Broersma, 1997. "Competition between employed and unemployed job searchers: is there a difference between the UK and The Netherlands?," Applied Economics Letters, Taylor & Francis Journals, vol. 4(3), pages 199-203.
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