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Regional dependencies in job creation: An efficiency analysis for Western Germany

Author

Listed:
  • Fahr, René
  • Sunde, Uwe
Abstract
This paper investigates the efficiency of the matching process between job seekers and vacancy posting firms in West Germany, using variation across labour market regions and across time. The results of a stochastic frontier analysis shed new light on the extent of and regional differences in search frictions, on potential determinants of frictional inefficiencies and on the consequences of German reunification for the matching process. The paper also presents novel evidence on the complex interactions between spatial contingencies among regional labour markets: matching efficiency decreases with spatial autocorrelation in hiring, implying indirect evidence for crowding externalities.

Suggested Citation

  • Fahr, René & Sunde, Uwe, 2006. "Regional dependencies in job creation: An efficiency analysis for Western Germany," Munich Reprints in Economics 20484, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:20484
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    References listed on IDEAS

    as
    1. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
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    5. René Fahr & Uwe Sunde, 2004. "Occupational job creation: patterns and implications," Oxford Economic Papers, Oxford University Press, vol. 56(3), pages 407-435, July.
    6. Broersma, Lourens & Van Ours, Jan C., 1999. "Job searchers, job matches and the elasticity of matching," Labour Economics, Elsevier, vol. 6(1), pages 77-93, March.
    7. Pekka Ilmakunnas & Hanna Pesola, 2003. "Regional Labour Market Matching Functions and Efficiency Analysis," LABOUR, CEIS, vol. 17(3), pages 413-437, September.
    8. Sergio Destefanis & Raquel Fonseca, 2006. "Labour Market Reform and the Beveridge Curve across Italian Regions," AIEL Series in Labour Economics, in: Floro Ernesto Caroleo & Sergio Destefanis (ed.), The European Labour Market. Regional Dimensions, edition 1, chapter 6, pages 147-163, AIEL - Associazione Italiana Economisti del Lavoro.
    9. Warren, Ronald S, Jr, 1991. "The Estimation of Frictional Unemployment: A Stochastic Frontier Approach," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 373-377, May.
    10. Burgess, Simon & Profit, Stefan, 2001. "Externalities in the matching of workers and firms in ritain," Labour Economics, Elsevier, vol. 8(3), pages 313-333, June.
    11. G. Karagiannis & P. Midmore & V. Tzouvelekas, 2002. "Separating Technical Change from Time-Varying Technical Inefficiency in the Absence of Distributional Assumptions," Journal of Productivity Analysis, Springer, vol. 18(1), pages 23-38, July.
    12. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    13. Fahr, René & Sunde, Uwe, 2002. "Employment Status, Endogenous Regional Mobility, and Spatial Dependencies in Labor Markets," IZA Discussion Papers 521, Institute of Labor Economics (IZA).
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    More about this item

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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