Long-Term Unemployment: Attached and Mismatched?

58 Pages Posted: 15 Dec 2015 Last revised: 3 Jan 2019

See all articles by David G. Wiczer

David G. Wiczer

SUNY Stony Brook - Department of Economics

Date Written: 2015-12-02

Abstract

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

Wiczer, David G., Long-Term Unemployment: Attached and Mismatched? (2015-12-02). FRB St. Louis Working Paper No. 2015-42. Available at SSRN: https://ssrn.com/abstract=2703736

David G. Wiczer (Contact Author)

SUNY Stony Brook - Department of Economics ( email )

NY 11733-4384
United States

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