Job Searchers, Job Matches and the Elasticity of Matching
CentER Working Paper No. 1998-72
Posted: 14 Oct 1999
Date Written: 1998
Abstract
This paper stresses the importance of a specification of the matching function in which the measure of job matches corresponds to the measure of job searchers. In many empirical studies on the matching function this requirement has not been fulfilled because it is difficult to find information about employed job searchers and job searchers from outside the labor market. In this paper, we specify and estimate matching functions where the flow corresponds to the correct stock. We use several approximations for the stock of non-unemployed job searchers. We find that the estimation results are sensitive to the approximation we use. Our main conclusion is that it is important to account for the behavior of non-unemployed job searchers since otherwise the estimated parameters of the matching function may be seriously biased.
JEL Classification: J60, J64
Suggested Citation: Suggested Citation