Accounting For Endogenous Search Behavior In Matching Function Estimation

The authors show that equilibrium matching models imply that standard estimates of the matching function elasticities are exposed to an endogeneity bias, which arises from the search behavior of agents on either side of the market. They offer an estimation method which, under certain assumptions, is immune from that bias. Application of their method to the estimation of a basic version of the matching function using aggregate U.S. data from the Job Openings and Labor Turnover Survey (JOLTS) suggests that the bias is quantitatively important.

Provided by: Institute for the Study of Labor Topic: Mobility Date Added: Jun 2011 Format: PDF

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