Accounting For Endogenous Search Behavior in Matching Function Estimation

Daniel Borowczyk-Martins, Gregory Jolivet and Fabien Postel-Vinay

No 5807, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We show that equilibrium matching models imply that standard estimates of the matching function elasticities are exposed to an endogeneity bias, which arises from the search behavior of agents on either side of the market. We offer an estimation method which, under certain assumptions, is immune from that bias. Application of our method to the estimation of a basic version of the matching function using aggregate U.S. data from the Job Openings and Labor Turnover Survey (JOLTS) suggests that the bias is quantitatively important.

Keywords: unemployment; matching function estimation; vacancies; job finding (search for similar items in EconPapers)
JEL-codes: J63 J64 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2011-06
New Economics Papers: this item is included in nep-dge and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published - published in: Review of Economic Dynamics, 2013, 16, 440–451

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Working Paper: Accounting For Endogenous Search Behavior in Matching Function Estimation (2011)
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