Labor market heterogeneity and the aggregate matching function

The matching function -a key building block in models of labor market frictions- impliesthat the job finding rate depends only on labor market tightness. We estimate such amatching function and find that the relation, although remarkably stable over 1967-2007,broke down spectacularly after 2007. We argue that labor market heterogeneities are notfully captured by the standard matching function, but that a generalized matching functionthat explicitly takes into account worker heterogeneity and market segmentation is fullyconsistent with the behavior of the job finding rate. The standard matching function canbreak down when, as in the Great Recession, the average characteristics of the unemployedchange too much, or when dispersion in labor market conditions -the extent to which somelabor markets fare worse than others- increases too much.

Is the matching function Cobb-Douglas?

[cat] Estudiem les propietats teòriques que una funció d.emparellament ha de satisfer per tal de representar un mercat laboral amb friccions dins d'un model d'equilibri general amb emparellament aleatori. Analitzem el cas Cobb-Douglas, CES i altres formes funcionals per a la funció d.emparellament. Els nostres resultats estableixen restriccions sobre els paràmetres d'aquests formes funcionals per assegurar que l.equilibri és interior. Aquestes restriccions aporten raons teòriques per escollir entre diverses formes funcionals i permeten dissenyar tests d'error d'especificació de model en els treballs empírics.

Is the matching function Cobb-Douglas?

[cat] Estudiem les propietats teòriques que una funció d.emparellament ha de satisfer per tal de representar un mercat laboral amb friccions dins d'un model d'equilibri general amb emparellament aleatori. Analitzem el cas Cobb-Douglas, CES i altres formes funcionals per a la funció d.emparellament. Els nostres resultats estableixen restriccions sobre els paràmetres d'aquests formes funcionals per assegurar que l.equilibri és interior. Aquestes restriccions aporten raons teòriques per escollir entre diverses formes funcionals i permeten dissenyar tests d'error d'especificació de model en els treballs empírics.

Business Cycles, Unemployment Insurance, and the Calibration of Matching Models

This paper points out an empirical puzzle that arises when an RBC economy with a job matching function is used to model unemployment. The standard model can generate sufficiently large cyclical fluctuations in unemployment, or a sufficiently small response of unemployment to labor market policies, but it cannot do both. Variable search and separation, finite UI benefit duration, efficiency wages, and capital all fail to resolve this puzzle. However, both sticky wages and match-specific productivity shocks help the model reproduce the stylized facts: both make the firm's flow of surplus more procyclical, thus making hiring more procyclical too.

Business cycles, unemployment insurance and the calibration of matching models

This paper theoretically and empirically documents a puzzle that arises when an RBC economy with a job matching function is used to model unemployment. The standard model can generate sufficiently large cyclical fluctuations in unemployment, or a sufficiently small response of unemployment to labor market policies, but it cannot do both. Variable search and separation, finite UI benefit duration, efficiency wages, and capital all fail to resolve this puzzle. However, either sticky wages or match-specific productivity shocks can improve the model's performance by making the firm's flow of surplus more procyclical, which makes hiring more procyclical too.

Youth unemployment outflow rates and labor market programs: Australian evidence

A matching function methodology is used to investigate the macroeconomic effects of labor market program (LMP) commencements on youth unemployment outflows in Australia using unpublished data that classify commencements and outflows by duration of unemployment. The results indicate that LMPs have had significant effects on outflows from short-term unemployment. There is a net positive effect from LMP commencements on short-term unemployed female outflow rates. However; females experienced negative spillover effects from male LMP commencements. These spillover effects appear to be associated with wage subsidy programs and suggest the net impact Of such programs may have been overstated in previous studies.

Meeting technologies and optimal trading mechanisms in competitive search markets

In a market in which sellers compete by posting mechanisms, we study how the properties of the meeting technology affect the mechanism that sellers select. In general, sellers have incentive to use mechanisms that are socially efficient. In our environment, sellers achieve this by posting an auction with a reserve price equal to their own valuation, along with a transfer that is paid by (or to) all buyers with whom the seller meets. However, we define a novel condition on meeting technologies, which we call “invariance,” and show that the transfer is equal to zero if and only if the meeting technology satisfies this condition.

Unemployment insurance with endogenous search intensity and precautionary saving

A welfare analysis of unemployment insurance (UI) is performed in a generalequilibrium job search model. Finitely-lived, risk-averse workers smooth consumption over time by accumulating assets, choose search effort whenunemployed, and suffer disutility from work. Firms hire workers, purchasecapital, and pay taxes to finance worker benefits; their equity is the assetaccumulated by workers. A matching function relates unemployment, hiringexpenditure, and search effort to the formation of jobs. The model is calibrated to US data; the parameters relating job search effort to the probability of job finding are chosen to match microeconomic studies ofunemployment spells. Under logarithmic utility, numerical simulation shows rather small welfaregains from UI. Even without UI, workers smooth consumption effectivelythrough asset accumulation. Greater risk aversion leads to substantiallylarger welfare gains from UI; however, even in this case much of its welfareimpact is due not to consumption smoothing effects, but rather to decreased work disutility, or to a variety of externalities.

Jobs, Unemployment, and Macroeconomic Transmission

Measuring Job Openings: Evidence from Swedish Plant Level Data. In modern macroeconomic models “job openings'' are a key component. Thus, when taking these models to the data we need an empirical counterpart to the theoretical concept of job openings. To achieve this, the literature relies on job vacancies measured either in survey or register data. Insofar as this concept captures the concept of job openings well we should see a tight relationship between vacancies and subsequent hires on the micro level. To investigate this, I analyze a new data set of Swedish hires and job vacancies on the plant level covering the period 2001-2012. I find that vacancies contain little power in predicting hires over and above (i) whether the number of vacancies is positive and (ii) plant size. Building on this, I propose an alternative measure of job openings in the economy. This measure (i) better predicts hiring at the plant level and (ii) provides a better fitting aggregate matching function vis-à-vis the traditional vacancy measure. Firm Level Evidence from Two Vacancy Measures. Using firm level survey and register data for both Sweden and Denmark we show systematic mis-measurement in both vacancy measures. While the register-based measure on the aggregate constitutes a quarter of the survey-based measure, the latter is not a super-set of the former. To obtain the full set of unique vacancies in these two databases, the number of survey vacancies should be multiplied by approximately 1.2. Importantly, this adjustment factor varies over time and across firm characteristics. Our findings have implications for both the search-matching literature and policy analysis based on vacancy measures: observed changes in vacancies can be an outcome of changes in mis-measurement, and are not necessarily changes in the actual number of vacancies. Swedish Unemployment Dynamics. We study the contribution of different labor market flows to business cycle variations in unemployment in the context of a dual labor market. To this end, we develop a decomposition method that allows for a distinction between permanent and temporary employment. We also allow for slow convergence to steady state which is characteristic of European labor markets. We apply the method to a new Swedish data set covering the period 1987-2012 and show that the relative contributions of inflows and outflows to/from unemployment are roughly 60/30. The remaining 10\% are due to flows not involving unemployment. Even though temporary contracts only cover 9-11\% of the working age population, variations in flows involving temporary contracts account for 44\% of the variation in unemployment. We also show that the importance of flows involving temporary contracts is likely to be understated if one does not account for non-steady state dynamics. The New Keynesian Transmission Mechanism: A Heterogeneous-Agent Perspective. We argue that a 2-agent version of the standard New Keynesian model---where a ``worker'' receives only labor income and a “capitalist'' only profit income---offers insights about how income inequality affects the monetary transmission mechanism. Under rigid prices, monetary policy affects the distribution of consumption, but it has no effect on output as workers choose not to change their hours worked in response to wage movements. In the corresponding representative-agent model, in contrast, hours do rise after a monetary policy loosening due to a wealth effect on labor supply: profits fall, thus reducing the representative worker's income. If wages are rigid too, however, the monetary transmission mechanism is active and resembles that in the corresponding representative-agent model. Here, workers are not on their labor supply curve and hence respond passively to demand, and profits are procyclical.

Coronary collateral function in the transplanted heart: propensity score matching with coronary artery disease

The function of the coronary collateral circulation in heart transplant patients has not been investigated in a controlled fashion. Since it partly belongs to the microcirculation, which is affected by transplant vasculopathy, the hypothesis was tested that the coronary collateral circulation in heart transplant recipients is less developed than in coronary artery disease (CAD) patients.

The stability of the equilibrium outcomes in the admission games induced by stable matching rules

A stable matching rule is used as the outcome function for the Admission game where colleges behave straightforwardly and the students` strategies are given by their preferences over the colleges. We show that the college-optimal stable matching rule implements the set of stable matchings via the Nash equilibrium (NE) concept. For any other stable matching rule the strategic behavior of the students may lead to outcomes that are not stable under the true preferences. We then introduce uncertainty about the matching selected and prove that the natural solution concept is that of NE in the strong sense. A general result shows that the random stable matching rule, as well as any stable matching rule, implements the set of stable matchings via NE in the strong sense. Precise answers are given to the strategic questions raised.

Prediction of enzyme function by combining sequence similarity and protein interactions

Background: A number of studies have used protein interaction data alone for protein function prediction. Here, we introduce a computational approach for annotation of enzymes, based on the observation that similar protein sequences are more likely to perform the same function if they share similar interacting partners. Results: The method has been tested against the PSI-BLAST program using a set of 3,890 protein sequences from which interaction data was available. For protein sequences that align with at least 40% sequence identity to a known enzyme, the specificity of our method in predicting the first three EC digits increased from 80% to 90% at 80% coverage when compared to PSI-BLAST. Conclusion: Our method can also be used in proteins for which homologous sequences with known interacting partners can be detected. Thus, our method could increase 10% the specificity of genome-wide enzyme predictions based on sequence matching by PSI-BLAST alone.

Altruism, dispersal, and phenotype-matching kin recognition.

We investigate the coevolution between philopatry and altruism in island-model populations when kin recognition occurs through phenotype matching. In saturated environments, a good discrimination ability is a necessary prerequisite for the emergence of sociality. Discrimination decreases not only with the average phenotypic similarity between immigrants and residents (i.e., with environmental homogeneity and past gene flow) but also with the sampling variance of similarity distributions (a negative function of the number of traits sampled). Whether discrimination should rely on genetically or environmentally determined traits depends on the apportionment of phenotypic variance and, in particular, on the relative values of e (the among-group component of environmental variance) and r (the among-group component of genetic variance, which also measures relatedness among group members). If r exceeds e, highly heritable cues do better. Discrimination and altruism, however, remain low unless philopatry is enforced by ecological constraints. If e exceeds r, by contrast, nonheritable traits do better. High e values improve discrimination drastically and thus have the potential to drive sociality, even in the absence of ecological constraints. The emergence of sociality thus can be facilitated by enhancing e, which we argue is the main purpose of cue standardization within groups, as observed in many social insects, birds, and mammals, including humans.

Low-molecular-weight or unfractionated heparin in venous thromboembolism: the influence of renal function.

BACKGROUND: In patients with acute venous thromboembolism and renal insufficiency, initial therapy with unfractionated heparin may have some advantages over low-molecular-weight heparin. METHODS: We used the Registro Informatizado de la Enfermedad TromboEmbólica (RIETE) Registry data to evaluate the 15-day outcome in 38,531 recruited patients. We used propensity score matching to compare patients treated with unfractionated heparin with those treated with low-molecular-weight heparin in 3 groups stratified by creatinine clearance levels at baseline: >60 mL/min, 30 to 60 mL/min, or <30 mL/min. RESULTS: Patients initially receiving unfractionated heparin therapy (n = 2167) more likely had underlying diseases than those receiving low-molecular-weight heparin (n = 34,665). Propensity score-matched groups of patients with creatinine clearance levels >60 mL/min (n = 1598 matched pairs), 30 to 60 mL/min (n = 277 matched pairs), and <30 mL/min (n = 210 matched pairs) showed an increased 15-day mortality for unfractionated heparin compared with low-molecular-weight heparin (4.5% vs 2.4% [P = .001], 5.4% vs 5.8% [P = not significant], and 15% vs 8.1% [P = .02], respectively), an increased rate of fatal pulmonary embolism (2.8% vs 1.2% [P = .001], 3.2% vs 2.5% [P = not significant], and 5.7% vs 2.4% [P = .02], respectively), and a similar rate of fatal bleeding (0.3% vs 0.3%, 0.7% vs 0.7%, and 0.5% vs 0.0%, respectively). Multivariate analysis confirmed that patients treated with unfractionated heparin were at increased risk for all-cause death (odds ratio, 1.8; 95% confidence interval, 1.3-2.4) and fatal pulmonary embolism (odds ratio, 2.3; 95% confidence interval, 1.5-3.6). CONCLUSIONS: In comparison with low-molecular-weight heparin, initial therapy with unfractionated heparin was associated with a higher mortality and higher rate of fatal pulmonary embolism in patients with creatinine clearance levels >60 mL/min or <30 mL/min, but not in those with levels between 30 and 60 mL/min.

Social justice in education : how the function of selection in educational institutions predicts support for (non)egalitarian assessment practices

Educational institutions are considered a keystone for the establishment of a meritocratic society. They supposedly serve two functions: an educational function that promotes learning for all, and a selection function that sorts individuals into different programs, and ultimately social positions, based on individual merit. We study how the function of selection relates to support for assessment practices known to harm vs. benefit lower status students, through the perceived justice principles underlying these practices. We study two assessment practices: normative assessment-focused on ranking and social comparison, known to hinder the success of lower status students-and formative assessment-focused on learning and improvement, known to benefit lower status students. Normative assessment is usually perceived as relying on an equity principle, with rewards being allocated based on merit and should thus appear as positively associated with the function of selection. Formative assessment is usually perceived as relying on corrective justice that aims to ensure equality of outcomes by considering students' needs, which makes it less suitable for the function of selection. A questionnaire measuring these constructs was administered to university students. Results showed that believing that education is intended to select the best students positively predicts support for normative assessment, through increased perception of its reliance on equity, and negatively predicts support for formative assessment, through reduced perception of its ability to establish corrective justice. This study suggests that the belief in the function of selection as inherent to educational institutions can contribute to the reproduction of social inequalities by preventing change from assessment practices known to disadvantage lowerstatus student, namely normative assessment, to more favorable practices, namely formative assessment, and by promoting matching beliefs in justice principles.