 Matching Inefficiencies, Regional Disparities, and UnemploymentSanna‐Mari Hynninen, Aki Kangasharju () and Jaakko Pehkonen LABOUR, 2009, vol. 23, issue 3, 481-506 Abstract: Abstract. In this paper we apply a stochastic frontier approach to examine how matching inefficiencies and regional disparities in structural factors contribute to regional and aggregate unemployment. Our results suggest that there would be a substantial decline in aggregate unemployment if (i) all local labour offices operated with full efficiency or (ii) they shared the same structure of job seekers and vacant jobs as the most favourable office. In the former case an increase in hirings would lower the average unemployment rate by 2.4 percentage points. In the latter case the decrease would be 1.4 percentage points. Further, we find that fixed effects are positively correlated with both a more favourable structure and higher efficiency. This suggests that the fixed effects may capture some part of time‐invariant features in the structure and inefficiency. Thus, the role of structural factors and inefficiency in regional unemployment disparities may be higher than estimated. Date: 2009 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:labour:v:23:y:2009:i:3:p:481-506 Ordering information: This journal article can be ordered from Access Statistics for this article LABOUR is currently edited by Franco Peracchi More articles in LABOUR from CEIS Contact information at EDIRC. |
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