Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20483
Authors: 
Coles, Melvyn G.
Petrongolo, Barbara
Year of Publication: 
2003
Series/Report no.: 
IZA Discussion paper series 723
Abstract: 
This paper tests whether aggregate matching is consistent with unemployment being mainly due to search frictions or due to job queues. Using U.K. data and correcting for temporal aggregation bias, estimates of the random matching function are consistent with previous work in this field, but random matching is formally rejected by the data. The data instead support "stock-flow" matching. Estimates find that around 50% of newly unemployed workers match quickly - they are interpreted as being on the short-side of their skill markets. The remaining workers match slowly, their re-employment rates depending statistically on the inflow of new vacancies and not on the vacancy stock. Having failed to match with existing vacancies, these workers wait for the arrival of new job vacancies. The results have important policy implications, particularly with reference to the design of optimal unemployment insurance programs.
Subjects: 
matching
unemployment
temporal aggregation
JEL: 
J64
J63
J41
E24
Document Type: 
Working Paper

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