Efficiency in spatially disaggregated labour market matching

Abstract

We analyse the efficiency in a labour market matching process. We contribute to the literature by comparing different spatial aggregation levels - NUTS-1 to NUTS-4 and analysing monthly and annual perspectives. We use data for Poland, a country with highly regionally diversified unemployment rate. We apply a stochastic matching frontier model for random, job queuing and stock-flow frameworks and test properties of the efficiency. Heterogeneity in the labour market in spatial and temporal perspectives and determinants of the matching inefficiency imply that different measures of economic policy should be applied to improve the efficiency of the labour market matching process.