Mismatch and the Forecasting Performance of Matching Functions

Artikel

This paper investigates the role of structural imbalance between job seekers and job openings for the forecasting performance of a labour market matching function. Starting from a Cobb-Douglas matching function with constant returns to scale (CRS) in each frictional micro market shows that on the aggregate level, a measure of mismatch is a crucial ingredient of the matching function and hence should not be ignored for forecasting hiring figures. Consequently, we allow the matching process to depend on the level of regional, qualificatory and occupational mismatch between unemployed and vacancies. In pseudo out-of-sample tests that account for the nested model environment, we find that forecasting models enhanced by a measure of mismatch significantly outperform their benchmark counterparts for all forecast horizons ranging between one month and a year. This is especially pronounced during and in the aftermath of the Great Recession where a low level of mismatch improved the possibility of unemployed to find a job again. The results show that imposing CRS helps improve forecast accuracy compared to unrestricted models.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: Oxford Bulletin of Economics and Statistics ; ISSN: 1468-0084 ; Volume: 79 ; Year: 2017 ; Issue: 1 ; Pages: 101-123 ; Oxford: Wiley

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes ; Model Evaluation, Validation, and Selection ; Forecasting Models; Simulation Methods ; Bargaining Theory; Matching Theory ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Macroeconomics: Consumption, Saving, Production, Employment, and Investment: Forecasting and Simulation: Models and Applications
• Thema: Matching Function ; Mismatch Indicators ; Forecast Evaluation

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Hutter, Christian ; Weber, Enzo
• Ereignis: Veröffentlichung
• (wer): Wiley ; ZBW - Leibniz Information Centre for Economics
• (wo): Oxford
• (wann): 2017

Weitere Informationen

• DOI: https://onlinelibrary.wiley.com/doi/10.1111/obes.12142
• Handle: http://hdl.handle.net/10419/263319
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ