Job acquisition processes and job searches in the Hungarian labour market : Examining regional and county differences

This article focuses on estimating the matching function that models job-matching processes in the Hungarian labour market. This matching function, which characterises the costly process of matching labour market demand and supply, is estimated using both aggregated data and regional and county-level data sources. Based on the estimated parameters of the function, we draw conclusions about how sensitive the finding rate is to changes in labour market tightness. Furthermore, we assess how changes in the number of job vacancies and unemployed individuals affect the outcome of successful matches in the Hungarian labour market. The results indicate that labour market tightness has a positive effect on the finding rate. On the aggregated labour market, labour supply plays a more significant role in determining successful job matches than labour demand. Due to the geographical immobility of the Hungarian labour force – characterised by a low willingness to relocate or commute – the domestic labour market is divided into regional and county-level sub-markets, each represented by matching functions with different parameters. Using regional and county-level data, we highlight the differences in job-matching processes across territorial units, as well as the potential factors and causes underlying these disparities. Initially, we hypothesise that the variation arises from differences in the technological parameter of the matching function. Subsequently, separate matching functions are estimated for each region and county. These estimations are based on datasets from Eurostat, the Hungarian Central Statistical Office (KSH), and the National Employment Service (NFSZ), covering time series data from the second quarter of 2010 to the third quarter of 2023.