Regional Spillovers and Spatial Heterogeneity in Matching Workers and Employers in Germany

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in In memory of my fatherAbstract. When job search takes place across labour markets, the standard flow approach to labour market analysis fails to uncover the effectiveness at which workers are matched to available jobs. A spatially augmented matching function is backed by a spatial search model with endogenous search intensity. Recent studies deal with the issue of spatial externalities by assuming the process of job matching to be homogenous across space. This study shows that this supposition is not valid for the unified Germany. Particularly differences in labour mobility give reason for the existence of West-East regimes of the matching process. Spatial heterogeneity is additionally found on the level of German macroregions. Though matching efficiency is affected by labour market characteristics, its cyclical pattern is closely related to business cycle fluctuations. Variation of regional mismatch over the business cycle can only explain a relatively small fraction of matching inefficiency.

Unemployment and vacancy flows in spatial labour market matching at the regional level. The case of a transition country

“…Burgess and Profit (2001) proved that high unemployment levels in neighbouring areas increased the number of filled vacancies in a given (local) area, but decreased the local outflow from unemployment; high vacancy levels in neighbouring areas raised the local outflow from unemployment and the local outflow of filled vacancies. Similar findings were obtained by Ilmakunnas and Pesola (2003) and Kosfeld (2007). Ilmakunnas and Pesola (2003) showed that unemployment figures in the surrounding areas exerted a negative effect on local labour markets, and that vacancies exerted a positive effect.…”

“…Ilmakunnas and Pesola (2003) showed that unemployment figures in the surrounding areas exerted a negative effect on local labour markets, and that vacancies exerted a positive effect. Kosfeld (2007) found that the strength of these effects was not stable across space. Hynninen (2005) proved that the congestion effect arose among job seekers in local labour markets, and was strengthened by spatial spillovers.…”

“…The presence of a more attractive labour force can attract more investment, which may in turn reinforce and prolong development disparities between regions (e.g., Kunz, 2012;Wajdi, Adioetomo, & Mulder, 2017). Commuting behaviour (interregional spatial mobility) seems to provide an intermediate solution, especially if developed regions with low unemployment rates are located next to regions with high unemployment rates (Clemente, Larramona, & Olmos, 2016;Kosfeld, 2007;Rijnks, Koster, & McCann, 2016). Commuting is less costly than moving and increases labour force mobility, and thus enhances the job creation process from a spatial perspective.…”

The Spatial Dimension of US House Price Developments

“…Kosfeld (2006), for example, finds differences in labor mobility between East and West Germany, and Molloy et al (2011) find differences in labor mobility across US regions. Furthermore, differences in the liquidity of the housing market and, thereby, in the transmission of price information and search costs could result in different amounts of information asymmetries across regions.…”

Spatial matching on the urban labor market: estimates with unique micro data

“…Some of the more specific works on labor market matching center on Germany and consider various levels of spatial aggregation. Among the most influential research is the paper by Kosfeld ( 2007 ). The author focused on German regions and proved that matching function coefficients estimations are not stable over space.…”