Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 279: The Matching Process: Search or Mismatch

Nils Gottfries () and Karolina Stadin ()
Additional contact information
Nils Gottfries: Uppsala University, UCLS, CESifo and IZA, Postal: Kyrkogårdsgatan 10B, Uppsala, Sweden
Karolina Stadin: The Ratio Institute and Uppsala Center for Labor Studies, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden

Abstract: We examine the matching process using monthly panel data for local labour markets in Sweden. We find that an increase in the number of vacancies has a very weak effect on the number of unemployed workers being hired: unemployed workers appear to be unable to compete for many available jobs. Vacancies are filled quickly and there is no (or only weak) evidence that high unemployment makes it easier to fill vacancies; hiring appears to be determined by labour demand while frictions and labour supply play small roles. These results indicate persistent mismatch in the Swedish labour market.

Keywords: structural unemployment; frictional unemployment; matching function; labour demand; labour supply

JEL-codes: J23; J62; J63; J64

46 pages, December 13, 2016

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ng_ks_matching_process_search_or_mismatch_279.pdf PDF-file 

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