Non-uniformity of job-matching in a transition economy: A nonparametric analysis for the Czech Republic

We consider problems in modelling job matching in the Czech Republic during the transition to a market economy Special interest is devoted to functional form considerations and the analysis of returns to scale of the matching function This explorative study aims to shed some light into the black box of the matching technology by applying nonparametric esti mation techniques which relax distributional assumptions Nonparametric additive modelling enables us to evaluate the matching process locally for each combination of the underlying matching factors rather than being restricted to global parameters We apply these techniques to a rich panel of monthly observations of unemployment vacancies and unemployment to job exits in all labor market districts in the Czech Republic between January and September and nd non linearities in the partial adjustment process as well as a partially negative coe cient of unemploy ment out ows with respect to vacancies in some years Moreover we nd locally increasing returns to scale in job matching which may be respon sible for multiple equilibrium unemployment rates in the Czech Republic during the transformation process JEL Classi cation C C J