Analyzing Matching Efficiency The role of mismatch In general : M = E m(u,v) M=number of new hires, u =unemployed, v = vacancies m = the matching function, which reflects the rate at which unemployed workers are being matched with vacant jobs. E = Indicator of matching efficiency, normalized at 1 initially. Thus if E>1, then Em increases for a given u & v, so we obtain better matching efficiency, while if E<1, then Em decreases for a given u & v, so we obtain worse matching efficiency. Workshop Jeugdwerkloosheid 21 mei 2013
Negative correlation between Vacancies (V) and Unemployment (U): The Beveridge curve Workshop Jeugdwerkloosheid 21 mei 2013
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