Accounting for endogeneity in matching function estimation

Borowczyk-Martins, Daniel; Jolivet, Grégory; Postel‐Vinay, Fabien

doi:10.1016/j.red.2012.07.001

Cited by 90 publications

(58 citation statements)

References 17 publications

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“…From the scattered data available at the time, there was also some evidence of shifts in the Beveridge curve for some countries. 11 Subsequent explanations of European unemployment based on the interaction between technological changes and rigid labor market institutions were more successful quantitatively (e.g., Ljungqvist and Sargent, 1998;Mortensen and Pissarides, 1999;Hornstein, Krusell and Violante, 2007). is exogenous.…”

Section: Environment and Planner Problemmentioning

confidence: 99%

“…10 The conjecture was that the oil shocks of the 1970s and the concurrent shift from manufacturing to services of empirical studies for various countries and concludes that mismatch was not an important explanation of the dynamics of European unemployment in the 1980s. 11 Our paper contributes to reviving this old literature by extending it in several directions: (i) we develop a dynamic, stochastic, environment with numerous sources of heterogeneity, (ii) we explain how to construct counterfactual measures of unemployment, absent mismatch, (iii) we incorporate the effect of misallocation on vacancy creation, and (iv) we perform our measurement at a much more disaggregated level, thanks to new micro data.…”

Section: Introductionmentioning

confidence: 99%

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Mismatch Unemployment

Şahin¹,

Song²,

Topa³

et al. 2012

115

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We develop a framework where mismatch between vacancies and job seekers across sectors translates into higher unemployment by lowering the aggregate job-finding rate. We use this framework to measure the contribution of mismatch to the recent rise in U.S. unemployment by exploiting two sources of cross-sectional data on vacancies, JOLTS and HWOL, a new database covering the universe of online U.S. job advertisements. Mismatch across industries and occupations explains at most 1/3 of the total observed increase in the unemployment rate, whereas geographical mismatch plays no apparent role. The share of the rise in unemployment explained by occupational mismatch is increasing in the education level.

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Section: Environment and Planner Problemmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Mismatch Unemployment

Şahin¹,

Song²,

Topa³

et al. 2012

115

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show abstract

“…Borowczyk- Martins et al (2013) propose a GMM procedure to correct for endogeneity. They use monthly data from JOLTS for vacancies and hires covering the period of 2001-2013 and find that their preferred GMM estimated elasticity is lower than the OLS one (.69 vs .84).…”

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confidence: 99%

Recall and Unemployment

Fujita¹,

Moscarini²

2013

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Using data from the Survey of Income and Program Participation (SIPP) covering 1990-2011, we document that a surprisingly large number of workers return to their previous employer after a jobless spell and experience more favorable labor market outcomes than job switchers. Over 40% of all workers separating into unemployment regain employment at their previous employer; over a fifth of them are permanently separated workers who did not have any expectation of recall, unlike those on temporary layoff. Recalls are associated with much shorter unemployment duration and better wage changes. Negative duration dependence of unemployment nearly disappears once recalls are excluded. We also find that the probability of finding a new job is more procyclical and volatile than the probability of a recall. Incorporating this fact into an empirical matching function significantly alters its estimated elasticity and the time-series behavior of matching efficiency, especially during the Great Recession. We develop a canonical search-and-matching model with a recall option where new matches are mediated by a matching function, while recalls are free and triggered both by aggregate and job-specific shocks. The recall option is lost when the unemployed worker accepts a new job. A quantitative version of the model captures well our cross-sectional and cyclical facts through selection of recalled matches.

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“…Among others, [4] and [5] highlight that the assumed function should be consistent with labor market behavior of firms and workers. Furthermore, [6] and [7] show that agents' behavior can be affected by labor market policies and institutions so that the matching function turns out to be endogenous.…”

Section: Introductionmentioning

confidence: 99%

Endogenous Ranking in the Two-Sector Urn-Ball Matching Process

Rose¹

2018

TEL

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This paper contributes to the debate concerning micro-foundations of matching functions in frictional labor markets. The focus is on a particular matching regime, i.e., the so-called urn-ball process. It is shown that in a twosector economy, even in the presence of heterogeneous workers, the assumption of applicants-ranking may be misleading. Instead, the choice concerning the adoption of either ranking or no-ranking behavior is endogenous and it is affected by both the tightness of the two sectors and the composition of the labor force in terms of skills. Moreover it is proved that exogenous shocks may change the form of the matching function. This result casts additional doubts on the assumption of exogenous matching function often made in empirical works aimed at assessing the effectiveness of policy measures.

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Accounting for endogeneity in matching function estimation

Cited by 90 publications

References 17 publications

Mismatch Unemployment

Mismatch Unemployment

Recall and Unemployment

Endogenous Ranking in the Two-Sector Urn-Ball Matching Process

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