Regional Dependencies in Job Creation: An Efficiency Analysis for Western Germany
University of Paderborn; Institute for the Study of Labor (IZA)
IZA Discussion Paper No. 1660
This paper investigates the efficiency of the matching process between job seekers and vacancy posting firms in West-Germany, using variation across labor market regions and across time. The results of a stochastic frontier analysis shed new light on extent and regional differences of 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 labor markets: matching efficiency decreases with spatial autocorrelation in hiring, implying indirect evidence for crowding externalities.
Number of Pages in PDF File: 34
Keywords: regional unemployment, stochastic frontier, matching function, spatial autocorrelation
JEL Classification: J61, J64, J21, R12working papers series
Date posted: July 21, 2005
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