Labour Market Matching Efficiency in the Czech Republic Transition

Abstract

Using the matching function and the monthly and yearly data from 1992 to 2000 of 76 Czech districts, this paper studies district specific characteristics affecting matching efficiency. Among the conclusions, it was found that the higher the educational level of the labour force and the higher the number of firms in new sectors, except in the commercial one, the more efficient the matching process. The results give evidence supporting the idea that employed workers participate in the matching process and, therefore, they are one of the sources of increasing returns to scale in the Czech matching function. Small new enterprises in the commercial sector are also a source of increasing returns.