Measuring Job-Finding Rates and Matching Efficiency with Heterogeneous Jobseekers

46 Pages Posted: 9 Feb 2015 Last revised: 20 Mar 2022

See all articles by Robert E. Hall

Robert E. Hall

Hoover Institution and Department of Economics, Stanford University; National Bureau of Economic Research (NBER)

Sam Schulhofer-Wohl

Federal Reserve Banks - Federal Reserve Bank of Dallas; Federal Reserve Bank of Chicago

Date Written: February 2015

Abstract

Matching efficiency is the productivity of the process for matching jobseekers to available jobs. Job-finding is the output; vacant jobs and active jobseekers are the inputs. Measurement of matching efficiency follows the same principles as measuring an index of productivity of production. We develop a framework for measuring matching productivity when the population of jobseekers is heterogeneous. The efficiency index for each type of jobseeker is the monthly job finding rate for the type adjusted for the overall tightness of the labor market. We find that overall matching efficiency declined smoothly over the period from 2001 through 2013. Measures of matching efficiency that neglect heterogeneity among the unemployed and also neglect jobseekers other than the unemployed suggest a 23 percent decline in efficiency between 2007 and 2009. We demonstrate that essentially all of this apparent decline results from changes in the composition of jobseekers rather than any true movement in efficiency. We also develop a new approach to measuring matching rates that avoids counting short-duration jobs as job-seeking successes.

Suggested Citation

Hall, Robert E. and Schulhofer-Wohl, Sam, Measuring Job-Finding Rates and Matching Efficiency with Heterogeneous Jobseekers (February 2015). NBER Working Paper No. w20939, Available at SSRN: https://ssrn.com/abstract=2562230

Robert E. Hall (Contact Author)

Hoover Institution and Department of Economics, Stanford University ( email )

Stanford, CA 94305-6010
United States
650-723-2215 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
650-723-2215 (Phone)

Sam Schulhofer-Wohl

Federal Reserve Banks - Federal Reserve Bank of Dallas ( email )

2200 North Pearl Street
PO Box 655906
Dallas, TX 75265-5906
United States

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

HOME PAGE: http://sschulh1.wordpress.com

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