Long-Term Unemployment: Attached and Mismatched?
58 Pages Posted: 15 Dec 2015 Last revised: 3 Jan 2019
Date Written: 2015-12-02
In this paper, I quantify the contribution of occupation-specific shocks and skills to unemployment duration and its cyclical dynamics. I quantify specific skills using microdata on wages, estimating occupational switching cost as a function of the occupations' difference in skills. The productivity shocks are consistent with job finding rates by occupation. For the period 1995-2013, the model captures 69.5% of long-term unemployment in the data, while a uniform finding rate delivers only 47.2%. In the Great Recession, the model predicts 72.9% of the long-term unemployment that existed in the data whereas a uniform finding rate would predict 57.8%.
Keywords: Occupational Choice, Human Capital, Unemployment Duration
JEL Classification: E24, E32, J24, J64
Suggested Citation: Suggested Citation