How can vacancy statistics be used to measure friction in job matching and the effects of friction on unemployment? First, measure deviations from instantaneous hirings by the average duration of recruitment as measured by the number of job vacancies divided by the number of hirings per month....

Firms create ‘vacancies’ in one sense (recruitment processes) in order to avoid ‘vacancies’ in another sense (unmet demand). The paper clarifies the different roles of these two concepts in labour market analysis, not only when interpreting Beveridge curves and matching functions, but...

While the matching function relates hirings (H) to vacancies (V) and unemployment, the duration function relates the average duration of vacancies as measured by V/H to unemployment. Shifts of the duration function are equivalent to shifts of the matching function but easier to interpret....

This paper is, firstly, a reappraisal of the matching function, arguing that the proper specification of the relation between hirings (H), vacancies (V), and unemployment is the duration function, which shows how average recruitment times as measured by V/H depend on unemployment and other...