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Labor Market Flexibility and Different Job-Matching Technologies Across Regions in India: An Analysis of State-Level Disaggregate Matching Functions

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  • Lee , Woong

    (Korea Institute for International Economic Policy)

Abstract

This paper examines the relationship between labor market flexibility and matching function efficiency in India. With state-level disaggregated data, the matching function in India is estimated to investigate differences in the matching function efficiency across regions of different labor market flexibility. In addition, matching parameters are estimated in the respective regions that categorized by the degree of labor market flexibility. It is the first original work that uses state-level data to estimate matching function in India. The data are drawn from Employment Exchange in India, the only public job centre in this country. The results show that there is no link between labor market flexibility and matching function efficiency. The evidence indicates that regions having inflexible labor markets reveal entirely vacancy-driven job matching process, which implies lack of labor demand. For these regions, it is recommended that policies to boost labor demand such as employment subsidies are appropriate to create more employment.

Suggested Citation

  • Lee , Woong, 2014. "Labor Market Flexibility and Different Job-Matching Technologies Across Regions in India: An Analysis of State-Level Disaggregate Matching Functions," Working Papers 14-4, Korea Institute for International Economic Policy.
    • Handle: RePEc:ris:kiepwp:2014_004
    DOI: 10.2139/ssrn.2634339
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    Cited by:

    1. Lee , Woong, 2015. "Estimating Regional Matching Efficiency in the Indian Labor Market: State-Level Panel Data for 1999-2013," Working Papers 15-3, Korea Institute for International Economic Policy.

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