Abstract:
This paper analyzes how the levels of unemployment and vacancies affect the rate at which unemployed workers find employment--the worker-firm 'matching function.' In particular, the authors test the robustness of previous empirical work by checking whether they obtain the same estimated function using cross-section data rather than aggregate time-series data. The authors find strong evidence of constant returns to scale which is strikingly similar to previous work. Copyright 1996 by The London School of Economics and Political Science.