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Unemployment Dynamics and Labour Market Tightness: An Empirical Evaluation of Matching Function Models

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  • Storer, P

Abstract

The implications of matching function models for the relationship between labour market tightness and the transition probability into employment are summarized. These implications are then tested using monthly data for three Canadian provinces: British Columbia, Ontario, and Quebec. Testing methods use flexible regression techniques so as to reduce the effect of any extraneous restrictions. The results show rough concordance between theoretical assumptions and empirical facts. Evidence of non-linearity in the estimated relationships favours a search-theoretic model of labour markets over one based on queues and some quantitative results offer guidance to those using "calibrated" search models in theoretical analysis. Copyright 1994 by John Wiley & Sons, Ltd.

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  • Storer, P, 1994. "Unemployment Dynamics and Labour Market Tightness: An Empirical Evaluation of Matching Function Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(4), pages 389-419, Oct.-Dec..
    • Handle: RePEc:jae:japmet:v:9:y:1994:i:4:p:389-419
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    Citations

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    Cited by:

    1. Daniel Munich & Jan Svejnar & Katherine Terrell, 2001. "Worker-firm Matching and Unemployment in Transition to a Market," Development and Comp Systems 0012011, University Library of Munich, Germany.
    2. Profit, Stefan, 1997. "Twin peaks in regional unemployment and returns to scale in job-matching in the Czech Republic," SFB 373 Discussion Papers 1997,63, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    3. Linda Y. Wong, 2003. "Can the Mortensen-Pissarides Model with Productivity Changes Explain U.S. Wage Inequality?," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 70-105, January.
    4. Storer, Paul, 1996. "Separating the effects of aggregate and sectoral shocks with estimates from a Markov-switching search model," Journal of Economic Dynamics and Control, Elsevier, vol. 20(1-3), pages 93-121.
    5. Stefan Profit & Stefan Sperlich, 2004. "Non-uniformity of job-matching in a transition economy - A nonparametric analysis for the Czech Republic," Applied Economics, Taylor & Francis Journals, vol. 36(7), pages 695-714.
    6. Munich, Daniel & Svejnar, Jan, 2009. "Unemployment and Worker-Firm Matching Theory and Evidence from East and West Europe," Policy Research Working Paper Series 4810, The World Bank.
    7. Brian Silverstone, 2001. "Some Aspects of Labour Market Flows in New Zealand 1986-2001," Working Papers in Economics 01/02, University of Waikato.
    8. Markus Gangl, 2000. "Education and Labour Market Entry across Europe : The Impact of Institutional Arrangements in Training Systems and Labour Markets," MZES Working Papers 25, MZES.
    9. Peter Rodenburg, 2007. "The Remarkable Place of the UV-Curve in Economic Theory," Tinbergen Institute Discussion Papers 07-088/1, Tinbergen Institute.
    10. René Fahr & Uwe Sunde, 2002. "On the Effects of Career Choice: Matching Efficiency of Different Occupations and Education Levels," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B1-1, International Conferences on Panel Data.
    11. Brian Silverstone & Will Bell, 2011. "Gross Labour Market Flows in New Zealand: Some Questions and Answers," Working Papers in Economics 11/15, University of Waikato.
    12. Chul‐In Lee, 2010. "Can Search‐Matching Models Explain Migration And Wage And Unemployment Gaps In Developing Economies? A Calibration Approach," Journal of Regional Science, Wiley Blackwell, vol. 50(2), pages 635-654, May.

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