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Vacancy Market Structure and Matching Efficiency

Author

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  • KAMBAYASHI Ryo
  • UENO Yuko

Abstract

This paper analyzes labor market frictions, caused by heterogeneity among traders on the demand side (firms). Vacancy numbers per firm created at once can vary, and this heterogeneity affects the application rate by job seekers. On the aggregate level, theory predicts that vacancy distribution would affect matching efficiency as a whole. Following this theory, we formulated a matching function that reflects market concentration level into its efficiency parameter, and verified by panel data estimation that a more concentrated market has better matching efficiency for the latter half of 90s in the Japanese labor market. Since the number of vacancies per establishment has been increasing again from the end of the 90s, this would be expected to lead to a more concentrated market structure, which could enhance matching efficiency in regional labor markets.

Suggested Citation

  • KAMBAYASHI Ryo & UENO Yuko, 2006. "Vacancy Market Structure and Matching Efficiency," ESRI Discussion paper series 160, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esj:esridp:160
    as

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    File URL: http://www.esri.go.jp/jp/archive/e_dis/e_dis160/e_dis160a.pdf
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    References listed on IDEAS

    as
    1. Richard Rogerson & Robert Shimer & Randall Wright, 2004. "Search-Theoretic Models of the Labor Market-A Survey," NBER Working Papers 10655, National Bureau of Economic Research, Inc.
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    9. Kano, Shigeki & Ohta, Makoto, 2005. "Estimating a matching function and regional matching efficiencies: Japanese panel data for 1973-1999," Japan and the World Economy, Elsevier, vol. 17(1), pages 25-41, January.
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    Full references (including those not matched with items on IDEAS)

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