Underestimated or overestimated: the matching function elasticities biased by worker inflows and outflows

Ewa Ga?ecka-Burdziak


The matching function elasticities are biased, underestimated or overestimated, if we omit the job seekers inflows and outflows. I analyse mathematically the direction of this bias and estimate the parameters of random, stock-flow and job queuing models, handling econometrically for the temporal aggregation bias in the data. I examine various sets of endogenous and exogenous variables from registered unemployment data in Poland and Spain. In Poland, the unemployment influences more matching than discouragement. In Spain, the job offers determine the trade process. In both cases, the above-mentioned elasticities are underestimated if we neglect certain worker flows.


A?lvarez de Toledo, Pablo and Nu?n?ez, Fernando and Usabiaga, Carlos. 2008. La funcio?n de emparejamiento en el mercado de trabajo espan?ol. Revista de Economia Aplicada 48 vol. XVI: 5-35.

Badanie Ankietowe Rynku Pracy. Raport 2012. Instytut Ekonomiczny National Bank of Poland. Accessed March 1, 2013, http://www.nbp.pl.

Benati, Luca. 2011. Some empirical evidence on the 'discouraged worker' effect. Economics Letters 70 (2011): 387-395.

Blanchard, Olivier and Diamond, Peter. 1989. The Beveridge Curve. Brookings Papers on Economic Activity 0:1: 1-76.

Blanchard, Olivier and Diamond, Peter. 1994. Ranking, Unemployment Duration, and Wages. Review of Economic Studies 61:3: 417-434.

Broersma, Lourens and van Ours, Jan, 1998. Job Searchers, Job Matches and The Elasticity of Matching. Open Access publications from Tilburg University, no. urn:nbn:nl:ui:12-80319.

Coles, Melvyn and Petrongolo, Barbara. 2008. A Test Between Stock-Flow Matching and the Random Matching Function Approach. International Economic Review Vol. 49, No. 4 (November): 1113-1141.

Coles, Melvyn and Smith, Eric. 1998. Marketplace and Matching. International Economic Review Vol. 39, No. 1 (Feb.): 239-254.

Galu?k, Kamil and Mnich, Daniel. 2005. Structural and Cyclical Unemployment: What Can We Derive from the Matching Function? Czech National Bank Working Paper Series 2.

Ga?ecka-Burdziak, Ewa. 2013. Mechanisms of labour market matching of job seekers and vacancies. PhD diss., Warsaw School of Economics.

Gregg, Paul and Petrongolo, Barbara. 2005. Stock-flow matching and the performance of the labor market. European Economic Review 49: 19872011.

Long, Clarence. 1953. Impact of effective demand on the labor supply. American Economic Review, Paper and Proceedings 43: 458-467.

Petrongolo, Barbara and Pissarides, Christopher. 2001. Looking into the Black Box: A Survey of the Matching Function. Journal of Economic Literature vol. XXXIX (June): 390-431.

Registered unemployment 1999-2013. Public Employment Services. Accessed September 1, 2013, http://www.psz.praca.gov.pl.

Servicio Pblico de Empleo Estatal. Accessed: September 3, 2012, http://www.sepe.es.

Shapiro, Carl and Stiglitz, Joseph. 1984. Equilibrium Unemployment as a Worker Discipline Device. American Economic Review Vol. 74, No. 3 (Jun.): 433-444.

DOI: http://dx.doi.org/10.17451/eko/47/2016/229


  • There are currently no refbacks.