Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2016:14: THE MATCHING PROCESS:SEARCH OR MISMATCH?

Nils Gottfries () and Karolina Stadin ()
Additional contact information
Nils Gottfries: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Karolina Stadin: Ratio

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

51 pages, November 24, 2016

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