Labor Flows and the Aggregate Matching Function: A Network-Based Test Using Employer-Employee Matched Records

10 Pages Posted: 16 Jul 2015

See all articles by Omar A Guerrero

Omar A Guerrero

Alan Turing Institute - Alan Turing Institute; University College London - Department of Economics

Eduardo Lopez

University of Oxford - Said Business School

Date Written: July 15, 2015

Abstract

The assumption of aggregate matching functions in labor markets is tested using a network configuration model for directed multi-graphs. We use employer-employee matched records of the universe of employees and firms in Finland and find that aggregate matching functions, even at the level of submarkets, cannot explain the vast majority of the observed patterns of labor flows between firms. Our findings suggest the need for theoretical frameworks that take into account the structure of labor market frictions.

Keywords: aggregate matching function, labor mobility, networks, labor reallocation, frictions, micro-data, job search, configuration model, employer-employee matched records

JEL Classification: J01, J6, J63, J64, C12, D85

Suggested Citation

Guerrero, Omar A and Lopez, Eduardo, Labor Flows and the Aggregate Matching Function: A Network-Based Test Using Employer-Employee Matched Records (July 15, 2015). Available at SSRN: https://ssrn.com/abstract=2631045 or http://dx.doi.org/10.2139/ssrn.2631045

Omar A Guerrero (Contact Author)

Alan Turing Institute - Alan Turing Institute ( email )

96 Euston Road
London, NW1 2DB
United Kingdom

University College London - Department of Economics ( email )

Drayton House, 30 Gordon Street
30 Gordon Street
London, WC1H 0AX
United Kingdom

Eduardo Lopez

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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