Reemployment probabilities and returns to matching

The assumption of constant returns in the matching function, embodied in mo st bilateral search models, is crucial to ensure the uniqueness of the unem ployment rate along a steady-state growth path. This article explores the e mpirical viability of this assumption by estimating individual reemployment probabilities on a sample of unemployment entrants. I apply hazard models to survey data on both completed and uncompleted unemployment durations. Th e hypothesis of constant returns to matching is not rejected, on the basis of the evidence that the job-finding hazard depends only on local labor mar ket tightness and is independent of its size.