The purpose of this paper is to explore the matching process before and after the Great Recession in the Netherlands. The Dutch case is interesting because it is characterised by increasing matching efficiency.
This paper uses data from 2001 to 2014 to study the Dutch labour market matching process accounting for the three labour market states and their heterogeneities.
The elasticity of hires with respect to the short-term employed was significant, positive and countercyclical, while elasticities relating to new entrants were procyclical. The matching function (MF) displays constant returns to scale (CRTS) when using an alternative labour supply (LS) measure that includes the short-term employed as jobseekers. The findings are at odds with the idea of mismatch and a shortage of skills. Search frictions for employers were lower and vacancies were filled faster. This can be related to the fact that in a loose labour market context with increasing short-term employment, employers increase their hiring of employed workers which generates negative externalities on unemployed.
The implications concern the specification of the MF and the CRTS assumption when using unemployment as a LS measure.
The authors would like to acknowledge the Marie Curie Initial Training Networks (FP7-PEOPLE-2013-ITN) project “EDUWORKS: Crossing borders in the comprehensive investigation of labour market matching processes: An EU-wide, trans-disciplinary, multilevel and science-practice-bridging training network”. They would also like to acknowledge www.webdatanet.eu (Cost action IS1004) and thank the participants at the AIAS lunch seminar on 23 April 2015 for their comments and suggestions. The authors would also like to thank Wiemer Salverda and Paul de Beer for their comments and help, and Statistics Netherlands for its support.
de Pedraza, P., Tijdens, K. and Visintin, S. (2018), "The matching process before and after the crisis in the Netherlands", International Journal of Manpower, Vol. 39 No. 8, pp. 1010-1031. https://doi.org/10.1108/IJM-10-2018-0329Download as .RIS
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