Matching Through Search Channels

Category: Macro Seminar
When: 19 Oktober 2021
, 14:15
 - 15:30
Where: HoF E.01/Deutsche Bank and online
Speaker: Leo Kaas (Goethe University)

Matching Through Search Channels

(with Carlos Carrillo-Tudela and Ben Lochner)

Abstract: Firms and workers predominately match via job postings, networks of business contacts or the public employment agency, all of which help to ameliorate search and information frictions in the labor market. In this paper we investigate the extent to which these different search channels have differential effects on labor market turnover and sorting. Using novel survey-administrative data for Germany and estimating a two-way fixed effects model to rank workers and firms, we find that (i) higher ranked firms and workers are more likely to match via job postings; (ii) lower ranked firms and workers are more likely to match via networks or the public employment agency; (iii) networks help to attract employed and higher ranked workers, especially for lower ranked firms . To interpret these empirical findings and to understand the role of search channels for worker turnover and wage inequality, we propose and structurally estimate an equilibrium search model with two-sided heterogeneity and multiple search channels. Our results point to an important role of networks in labor market sorting, whereas the public employment agency has only a modest impact on sorting and unemployment.

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