Work

Labor Market Heterogeneity and the Aggregate Matching Function

Year: 2015

Type: article

Abstract: We estimate an aggregate matching function and find that the regression residual, which captures movements in matching efficiency, displays procyclical fluctuations and a dramatic decline after 2007. Using a matching function framework that explicitly takes into account worker heterogeneity as well as market segmentation, we show that matching efficiency movements can be the result of variations in the degree of heterogeneity in the labor market. Matching efficiency declines substantially when, as in the Great Recession, the average characteristics of the unemployed deteriorate substantially, or when dispersion in labor market conditions—the extent to which some labor markets fare worse than others—increases markedly. (JEL E24, E32, J41, J42)

Source: American Economic Journal Macroeconomics

DOI: 10.1257/mac.20140116

Authors: Regis Barnichon, Andrew Figura

Institutions: Universitat Pompeu Fabra, Centre de Recerca en Economia Internacional, Barcelona School of Economics, Federal Reserve Board of Governors

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W1481008326

FWCI: 42.54

Cites: 50

Cited by: 164

Related to: 10