DP939 Understanding the Matching Function: The Role of Newspapers and Job Agencies

Author(s): Melvyn G Coles
Publication Date: April 1994
Keyword(s): Job Centres, Matching, Returns to Scale
JEL(s): J63, J64
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=939

This paper provides a microeconomic model of matching which implies that the standard, reduced form approach, is misspecified. A simple model is analysed (with help-wanted/employment-needed advertising) where the matching rate depends not only on the stocks of unemployed and vacancies in the market, but also on the flows of new vacancies and new job seekers. The model is consistent with the empirical fact that one-quarter of all new vacancies posted in a job centre are filled the same day.