How does matching work in the labour market? Lessons from internet-based search activity and actual outcomes

About the project

Knowledge about the search behaviour of individuals and companies in the matching process is central to the design of labour market policy. Despite this, the understanding of what drives matching is lacking, which is partly due to limited information about how individuals and companies go about finding each other. This project aims to provide new knowledge about the search behaviour of job seekers and recruiting companies in the Swedish labour market.

The project uses newly collected data about the search behaviour of individuals and companies on the Public Employment Service's, and Sweden's largest, job site Platsbanken. This data will be matched against individual information in administrative registers, which provides unique opportunities to observe both search activity and important realised labour market outcomes, such as starting salaries and length of employment, for a large proportion of Sweden's job seekers and recruiting companies.

The project has three main parts. The first part aims to contribute with a detailed description of the search behaviour among Swedish job seekers, and how this differs in different dimensions. For example, the project will shed light on job seekers' professional and geographical preferences based on their search patterns and whether, and if so, how, these change over the unemployment period and with the situation on the labour market.

The second part aims to describe which criteria companies use when searching for new candidates. For this subproject, historical job advertisements published in the job bank are analysed, matched to information on actual employment. An important aspect of the data used in the project is that they contain the full description of the advertised jobs. The project will use this data and text analysis methods to characterise how employers' requirement profiles change with the time that the vacancy remains unfilled, as well as whether, and if so how, these search criteria change depending on the economic situation.

The third subproject places particular focus on contrasting employment via vacancies with employment via informal employment channels (social contacts). A large body of research literature shows that social contacts are crucial in the employment process. However, a deeper understanding of why is lacking. The project will use information on advertised vacancies and actual employment to shed light on questions such as "How are (employment agency) vacancies related to employment?", "Are formal and informal recruitment channels used in parallel or as substitutes?" and "What is the significance of job offers coming via networks for wage growth?"

The goal of the project is to contribute with results that can improve the understanding of the information problems that underlie modern labour market theory. The project will also create knowledge about which tools can be used to increase matching efficiency. The goal is that this research will ultimately lead to reduced frictional unemployment, as well as increased productivity among employees through improved matching in the Swedish labour market.