Revisiting the matching function

Britta Kohlbrecher, Christian Merkl and Daniela Nordmeier
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Daniela Nordmeier: Deutsche Bundesbank

No 201405, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "Many labor market models use both idiosyncratic productivity and a vacancy free entry condition. This paper shows that these two features combined generate an equilibrium comovement between matches on the one hand and unemployment and vacancies on the other hand, which is observationally equivalent to a constant return Cobb-Douglas function commonly used to model match formation. We use German administrative labor market data to show that the matching function correlation solely based on idiosyncratic productivity and free entry is very close to the empirical matching function. Consequently, we argue that standard matching function estimations are seriously biased if idiosyncratic productivity plays a role for match formation. In this case, they are not suitable for the calibration of labor market models." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Stichprobe der Integrierten Arbeitsmarktbiografien (SIAB); matching; offene Stellen; Arbeitslose; Arbeitsmarkttheorie (search for similar items in EconPapers)
JEL-codes: E24 E32 J63 J64 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2014
New Economics Papers: this item is included in nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in/as: Journal of Economic Dynamics and Control, Vol. 69, No. August (2016), S. 350-374, doi:10.1016/j.jedc.2016.05.018

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https://doku.iab.de/discussionpapers/2014/dp0514.pdf

Related works:
Journal Article: Revisiting the matching function (2016)
Working Paper: Revisiting the Matching Function (2016)
Working Paper: Revisiting the Matching Function (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:201405

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