NEW MICROFOUNDATIONS FOR THE AGGREGATE MATCHING FUNCTION

Margaret Stevens ()

International Economic Review, 2007, vol. 48, issue 3, 847-868

Abstract: Empirical studies of the aggregate labor market matching function have favored a Cobb-Douglas functional form, for which there are no microfoundations in the existing literature. I present a new model for the matching process, based on a "telephone-line" Poisson queuing process, which, unlike other microeconomic approaches, can be integrated directly into standard theoretical search models. This implies a CES matching function, approximately Cobb-Douglas when search costs are approximately linear. The model allows empirical estimates of matching function parameters to be interpreted in terms of the costs and benefits of search. Copyright 2007 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (93)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ier:iecrev:v:48:y:2007:i:3:p:847-868

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Harold L. Cole

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and ().