Cross-Section Estimation of the Matching Function: Evidence from England and Wales

Abstract

This paper analyzes how the levels of unemployment and vacancies affect the rate at which unemployed workers find employment - the worker-firm 'matching function.' In particular, the authors test the robustness of previous empirical work by checking whether they obtain the same estimated function using cross-section data rather than aggregate time-series data. The authors find strong evidence of constant returns to scale which is strikingly similar to previous work.