Journal of Labor Economics Vol. 15 No. 1, Part 2 1997
Help Wanted, Job Needed: Estimates of a Matching Function from Employment Service Data
Abstract
I estimate a function that matches vacant jobs and unemployed workers to produce new hires. Israeli law requiring vacancy registration yields unique data quality. The literature underestimates matching function coefficients because of a simultaneity bias, as the outflow of hires depletes stocks of unemployed and vacancies. Instruments and a new simulation method address this bias. A new test reveals strong evidence of heterogeneity in unemployed and vacancies. Estimates imply labor market dynamics that absorb shocks completely within only 2 months. Reductions in the hire rate of referrals can explain a 2.1 percentage point increase in unemployment between 1978 and 1990.
- DOI
- 10.1086/209863
- Volume
- 15
- Issue
- 1, Part 2
- Pages
- S251-S292
- Language
- en
- Sources
- openalex crossref