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Vacancies, Hirings, and the Duration Function

Author

Listed:
  • Farm, Ante

    (Swedish Institute for Social Research, Stockholm University)

Abstract
While the matching function relates hirings (H) to vacancies (V) and unemployment, the duration function relates the average duration of vacancies as measured by V/H to unemployment. Shifts of the duration function are equivalent to shifts of the matching function but easier to interpret. Therefore, this paper focuses on the microfoundations of the duration function. We find, first, that outward shifts of the duration function, or, equivalently, longer recruitment times at given unemployment, have no direct effects on hirings. Second, the effect of longer recruitment times on hirings through higher recruitment costs depends on the relative importance of vacancy costs in total recruitment costs, where vacancy costs include the opportunity cost of unfilled jobs. Third, this paper reports information on unfilled jobs (unmet demand) as distinct from job vacancies (recruitment processes) according to a new business survey in Sweden.

Suggested Citation

  • Farm, Ante, 2003. "Vacancies, Hirings, and the Duration Function," Working Paper Series 2/2003, Stockholm University, Swedish Institute for Social Research.
    • Handle: RePEc:hhs:sofiwp:2003_002
    as

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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Job vacancies; hirings; friction; matching function; Beveridge curve;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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