Seasonal Changes in the Matching Function: Case Study for Poland

The research objective was to evaluate if the matching function is subject to seasonal variation on Polish labor market. The analysis was conducted with a help of matching function parameters calculated for each month. The research leveraged data on monthly outflow from the unemployment pool and the number of vacancies in Poland from 2000 to 2013. All variables were subject to distinct seasonality patterns. The number of vacancies was characterized by the highest seasonal variation, whereas the lowest variation was observed for the number of registered unemployed persons. Moreover the matching function was enhanced with a binary variable describing periods of increase and decrease in unemployment. The analysis indicated a clear yearly pattern in elasticity coefficients in the matching function. The pattern was similar both elasticity coefficients (outflow from the unemployment pool and the number of vacancies). The highest values were reached during winter months and the lowest during summer months. Similar pattern was observed with regards to returns to scale. Increasing returns to scale were observed between December and May and decreasing returns between June and October. The results indicated a distinct seasonal variation in matching function related to seasonal variation on Polish labor market.