Regional Analysis Of Croatian Labour Market Efficiency

The main emphasis of this research is directed to defi ning a newly risen structural changes and disequlibrium in the Croatian labour market during the transition period. The existing labour supply adjusts itself harder to the changing labour demand, which is connected with the growing competition on the global market and accelerated technological changes. The empirical part of the research is attributed to a disaggregated analysis of a matching process according to the counties in Croatia. By empirical application of theoretical form of disaggregated matching function according to counties in observed period it is concluded that it is more reliable to use a translog form of the matching function as compared to the log-linear form of the classical matching function. With it, it is confirmed that the model of matching, that is new hiring or outfl ow (O), is much better described with the two independent variables – unemployed persons (U) and available vacancies (V). The econometric disaggregated analysis implies to a simultaneous existence of labour supply and demand surplus or existence of regional mismatch in single counties. By introduction of dummy variables in the selected model of matching function it is confirmed that war circumstances in Croatia had inversely proportional influence on the effi ciency of new hiring.