Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129388
Authors: 
Eriksson, Stefan
Stadin, Karolina
Year of Publication: 
2015
Series/Report no.: 
Working Paper, IFAU - Institute for Evaluation of Labour Market and Education Policy 2015:14
Abstract: 
In this paper, we study the relative importance of demand and supply factors for hiring. We use a search-matching model with imperfect competition in the product market to derive an equation for total hiring in a local labor market and estimate it on Swedish panel data. If product markets are imperfectly competitive, product demand shocks should have a direct effect on employment. Our main finding is that product demand is important for hiring. This highlights the importance of taking imperfect competition in the product market into account in studies of employment dynamics and hiring. We also find that the number of unemployed workers has a positive effect on hiring, confirming the importance of search frictions. Hence, both demand and supply factors seem to matter for hiring.
Subjects: 
hiring
search-matching
imperfect competition
unemployment
JEL: 
E24
J23
J64
Document Type: 
Working Paper

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