Matching function elasticities on the Polish labor market with respect to stock and flow variables

• Published in: Gospodarka narodowa (Warsaw, Poland : 1990) Vol. 4; pp. 109 - 126
• Main Author: Galecka-Burdziak, Ewa
• Format: Journal Article
• Language: English
• Published: 01.01.2012
• Subjects: Econometrics; Estimation; Job vacancies; Labour economics; Labour market; Macroeconomics; Poland; Unemployment levels
• ISSN: 0867-0005

The article is concerned with a process of adjustment between job seekers and vacancies on Poland's labor market from 1998 to 2010. The process is known as labor market matching. The aim of the paper is to estimate matching function elasticities on the basis of quarterly data with respect to stock variables (unemployment stock and vacancy stock) and flow variables (unemployment inflow and vacancy inflow). The empirical analysis is based on estimates of both random and non-random matching function models, including concerned, the model is based on cost, revenue and profit functions inspired by R. Vernon's theory of product life cycles. These functions are synchronized and combined into a single model, which also incorporates the formally modified IS-LM-BP model. The main conclusion from the analysis is that the contemporary economy is a heterogeneous entity. At the same time, it is market driven in the sense that it is possible not to differentiate among the different kinds of investments in the model. But the contemporary economy is also subject to impacts that are not seen as market driven under the neoclassical view.