The labour market matching efficiency in Australian regions

Bibliographic Data

ID9722247
AuthorsSean Kelly (0000-0002-2415-0375, James Cook University), Daniel Grainger (0000-0001-9430-0001, Commonwealth Scientific and Industrial Research Organisation), Sizhong Sun (0000-0001-8430-915X, James Cook University, corresponding author), Riccardo Welters (0000-0001-7761-4949, James Cook University)
Year2025
Volume93
Issue369
Pages52-85
Publication date2025-09-16
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1111/ecca.70009
OpenAlexW4414246793
LanguageEN
References cited26

We advance the literature on estimating job matching functions in two ways. Scholars acknowledge that past matching efficiency affects current job search and posting behaviour (i.e. tightness is endogenous); however, they so far ignore that forecast (lead) matching efficiency may also affect tightness. We specify a model that accommodates lagged and lead efficiency to address both endogeneity channels. Scholars also acknowledge that matching efficiency may be region‐specific; however, a test to formally evaluate matching heterogeneity is missing, for which we develop a ‐distributed test statistic. Using regional Australian data, we (i) demonstrate that lead matching efficiency indeed endogenizes labour market tightness, and (ii) confirm matching heterogeneity in the Australian regional context. Both innovations have policy relevance, and their application will improve matching efficiency estimates and provide policymakers with a tool to test whether region‐specific labour market policy is warranted

Endogeneity · Lead (geology) · Market efficiency · Matching (statistics) · Optimal matching · Test (biology) · Education Systems and Policy · Labor market dynamics and wage inequality · Unemployment and Economic Growth

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Open DOIOpen Access