2001/06/01 by Barbara Petrongolo, Bárbara Petrongolo, Christopher A Pissarides +1 · 14 citations
Economics, Econometrics and Finance · Business, Management and Accounting · #Economic theories and models #Labor market dynamics and wage inequality #Consumer Market Behavior and Pricing
paper · doi:10.1257/jel.39.2.390
This paper surveys the microfoundations, empirical evidence, and estimation issues underlying the aggregate matching function. There is no consensus yet on microfoundations but one is emerging on estimation. An aggregate, constant returns, Cobb-Douglas matching function with hires as a function of vacancies and unemployment has been successfully estimated for several countries. Recent work has utilized disaggregated data to go beyond aggregate estimates, with many refinements and suggestions for future research. The paper discusses spatial aggregation issues, and implications of on-the-job search and of the timing of stocks and flows for estimated matching functions.