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Firm-to-firm labor flows and the aggregate matching function: A network-based test using employer–employee matched records

Omar Guerrero and Eduardo López

Economics Letters, 2015, vol. 136, issue C, 9-12

Abstract: The assumption of aggregate matching functions in labor markets is tested using a network configuration model for directed multigraphs. We use employer–employee matched records of the universe of employees and firms in Finland and find that aggregate matching functions, even at the level of submarkets, cannot explain the vast majority of the observed patterns of labor flows between firms. Our findings suggest the need for theoretical frameworks that take into account the structure of labor market frictions.

Keywords: Aggregate matching function; Networks; Multigraphs; Labor reallocation; Job search; Employer–employee matched records (search for similar items in EconPapers)
JEL-codes: J01 J6 J63 J64 C12 D85 (search for similar items in EconPapers)
Date: 2015
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