Vacancies, Hirings, and the Duration Function

Ante Farm ()
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Ante Farm: Swedish Institute for Social Research, Stockholm University, Postal: SE-106 91 Stockholm, Sweden

No 2/2003, Working Paper Series from Stockholm University, Swedish Institute for Social Research

Abstract: While the matching function relates hirings (H) to vacancies (V) and unemployment, the duration function relates the average duration of vacancies as measured by V/H to unemployment. Shifts of the duration function are equivalent to shifts of the matching function but easier to interpret. Therefore, this paper focuses on the microfoundations of the duration function. We find, first, that outward shifts of the duration function, or, equivalently, longer recruitment times at given unemployment, have no direct effects on hirings. Second, the effect of longer recruitment times on hirings through higher recruitment costs depends on the relative importance of vacancy costs in total recruitment costs, where vacancy costs include the opportunity cost of unfilled jobs. Third, this paper reports information on unfilled jobs (unmet demand) as distinct from job vacancies (recruitment processes) according to a new business survey in Sweden.

Keywords: Job vacancies; hirings; friction; matching function; Beveridge curve (search for similar items in EconPapers)
JEL-codes: J63 J64 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2003-01-13
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:sofiwp:2003_002

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