Mismatch Unemployment

81 Pages Posted: 28 Sep 2012

See all articles by Aysegul Sahin

Aysegul Sahin

Federal Reserve Bank of New York

Joseph Song

Federal Reserve Banks - Federal Reserve Bank of New York

Giorgio Topa

Federal Reserve Bank of New York

Giovanni L. Violante

New York University, Department of Economics; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: August 2012

Abstract

We develop a framework where mismatch between vacancies and job seekers across sectors translates into higher unemployment by lowering the aggregate job-finding rate. We use this framework to measure the contribution of mismatch to the recent rise in U.S. unemployment by exploiting two sources of cross-sectional data on vacancies, JOLTS and HWOL, a new database covering the universe of onlineU.S. job advertisements. Mismatch across industries and occupations explains at most 1/3 of the total observed increase in the unemployment rate, whereas geographical mismatch plays no apparent role. The share of the rise in unemployment explained by occupational mismatch is increasing in the education level.

Keywords: great recession, mismatch, unemployment, vacancies

JEL Classification: E3, J2, J6

Suggested Citation

Sahin, Aysegul and Song, Joseph and Topa, Giorgio and Violante, Giovanni L., Mismatch Unemployment (August 2012). CEPR Discussion Paper No. DP9093. Available at SSRN: https://ssrn.com/abstract=2153543

Aysegul Sahin (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Joseph Song

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Giorgio Topa

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Giovanni L. Violante

New York University, Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States
212-992-9771 (Phone)
212-995-4186 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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