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Unemployment dynamics and labour market tightness: An empirical evaluation of matching function models
Author(s) -
Storer P.
Publication year - 1994
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.3950090407
Subject(s) - matching (statistics) , unemployment , econometrics , economics , function (biology) , statistics , mathematics , macroeconomics , evolutionary biology , biology
The implications of matching function models for the relationship between labour market tightness and the transition probability into employment are summarized. These implications are then tested using monthly data for three Canadian provinces: British Columbia, Ontario, and Quebec. Testing methods use flexible regression techniques so as to reduce the effect of any extraneous restrictions. The results show rough concordance between theoretical assumptions and empirical facts. Evidence of non‐linearity in the estimated relationships favours a search‐theoretic model of labour markets over one based on queues and some quantitative results offer guidance to those using ‘calibrated’ search models in theoretical analysis.