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A Theory of Vacancies

Author

Listed:
  • Farm, Ante

    (Swedish Institute for Social Research, Stockholm University)

Abstract

This paper is, firstly, a reappraisal of the matching function, arguing that the proper specification of the relation between hirings (H), vacancies (V), and unemployment is the duration function, which shows how average recruitment times as measured by V/H depend on unemployment and other relevant variables. Secondly, indirect effects of longer recruitment times on employment through higher recruitment costs are studied by extending previous models to include both price formation and the distinction between vacancy costs and hiring costs. Thirdly, direct effects of longer recruitment times on employment through more unfilled jobs are explored and illustrated with data from Sweden since 2000 from a new business survey, which measures not only job vacancies but also unfilled jobs.

Suggested Citation

  • Farm, Ante, 2004. "A Theory of Vacancies," Working Paper Series 1/2005, Stockholm University, Swedish Institute for Social Research.
    • Handle: RePEc:hhs:sofiwp:2005_001
    as

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    References listed on IDEAS

    as
    1. Barron, John M & Bishop, John, 1985. "Extensive Search, Intensive Search, and Hiring Costs: New Evidence on Employer Hiring Activity," Economic Inquiry, Western Economic Association International, vol. 23(3), pages 363-382, July.
    2. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    3. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    4. Barron, John M & Bishop, John & Dunkelberg, William C, 1985. "Employer Search: The Interviewing and Hiring of New Employees," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 43-52, February.
    5. Charles Holt & Martin David, 1966. "The Concept of Job Vacancies in a Dynamic Theory of the Labor Market," NBER Chapters, in: The Measurement and Interpretation of Job Vacancies, pages 73-110, National Bureau of Economic Research, Inc.
    6. Abraham, Katharine G, 1983. "Structural-Frictional vs. Deficient Demand Unemployment: Some New Evidence," American Economic Review, American Economic Association, vol. 73(4), pages 708-724, September.
    7. Farm, Ante, 2003. "Defining and Measuring Unmet Labour Demand," Working Paper Series 1/2003, Stockholm University, Swedish Institute for Social Research.
    8. W. Thomson, 1966. "Collection and Use of Job Vacancy Data in Canada," NBER Chapters, in: The Measurement and Interpretation of Job Vacancies, pages 173-194, National Bureau of Economic Research, Inc.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Vacancies; hirings; matching function; friction;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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