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Open Access Knowledge and Scholarship

Date of Award

5-2018

Culminating Project Type

Thesis

Degree Name

Applied Economics: M.S.

Department

Economics

College

School of Public Affairs

First Advisor

Mana Komai

Second Advisor

Patricia A. Hughes

Third Advisor

Lynn A. Collen

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Abstract

Matching efficiency is one of the most important labor market indicators. It demonstrates how effectively the labor market matches unemployed workers to job vacancies. Various factors, including government policy, might have an impact on matching efficiency. The main objective of this thesis is to explore the influence of government policy on the matching efficiency of Minnesota in 1995-2017. The paper describes the process of calculating the monthly values of matching efficiency based on a Cobb-Douglas matching function with constant returns to scale. This empirically obtained variable is used for examining the relationship between the calculated matching efficiency of the labor market of Minnesota and elements of government policy. This research studies the impact of a minimum wage, government spending, refugee arrivals, and Medicaid enrollment on the state’s matching efficiency. Empirical analysis shows that only one investigated potential predictor of matching efficiency has a positive correlation with the response variable.

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