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Strategic Hiring Behavior in Empirical Matching Functions

Author

Listed:
  • Fahr, René

    (University of Paderborn)

  • Sunde, Uwe

    (University of Munich)

Abstract

This paper makes two contributions to the empirical matching literature. First, a recent study by Anderson and Burgess (2000) testing for endogenous competition among job seekers in a matching frame-work, is replicated with a richer and more accurate data set for Germany. Their results are confirmed and found to be surprisingly robust. Second, the matching framework is augmented by endogenous strategic hiring behavior on the side of vacancy-posting firms. Neglecting job competition, the relevance of strategic hiring is shown using the same empirical strategy. At the same time, the test is shown to be invalid if both types of endogenous behavior are present

Suggested Citation

  • Fahr, René & Sunde, Uwe, 2001. "Strategic Hiring Behavior in Empirical Matching Functions," IZA Discussion Papers 320, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp320
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, April.
    4. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-1418, December.
    5. Karen Mumford & Peter N. Smith, 1999. "The Hiring Function Reconsidered: on Closing the Circle," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 343-364, August.
    6. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 819-863.
    7. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-690, September.
    8. Franz, Wolfgang, 1991. "German labour markets after unification," Discussion Papers, Series II 162, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    9. Sicilian, Paul, 1995. "Employer search and worker-firm match quality," The Quarterly Review of Economics and Finance, Elsevier, vol. 35(35), pages 515-532.
    10. van Ours, Jan C., 1995. "An empirical note on employed and unemployed job search," Economics Letters, Elsevier, vol. 49(4), pages 447-452, October.
    11. Belzil, Christian, 2000. "Job Creation and Job Destruction, Worker Reallocation, and Wages," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 183-203, April.
    12. Patricia M. Anderson & Simon M. Burgess, 2000. "Empirical Matching Functions: Estimation and Interpretation Using State-Level Data," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 93-102, February.
    13. Burgess, Simon M, 1993. "A Model of Competition between Unemployed and Employed Job Searchers: An Application to the Unemployment Outflow Rate in Britain," Economic Journal, Royal Economic Society, vol. 103(420), pages 1190-1204, September.
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    Cited by:

    1. Fahr, René & Sunde, Uwe, 2002. "Estimations of Occupational and Regional Matching Efficiencies Using Stochastic Production Frontier Models," IZA Discussion Papers 552, Institute of Labor Economics (IZA).
    2. Sunde, Uwe, 2002. "Unobserved Bilateral Search on the Labor Market: A Theory-Based Correction for a Common Flaw in Empirical Matching Studies," IZA Discussion Papers 520, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    strategic hiring; Matching models; job search; vacancies; unemployment; job competition;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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