Mismatch Unemployment - Federal Reserve Bank of New York

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Staff Reports

Mismatch Unemployment

August 2012 Number 566
Revised: June 2013

JEL classification: E24, J23, J63, J64

Authors: Aysegul Sahin, Joseph Song, Giorgio Topa, and Giovanni L. Violante

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 online U.S. job advertisements). Mismatch across industries and occupations explains at most one-third of the total observed increase in the unemployment rate. Geographical mismatch plays no apparent role. Occupational mismatch has become especially more severe for college graduates, and in the West of the United States.

Available only in PDF pdf

78 pages / 762 kb

For a published version of this report, see Ayşegül Şahin, Joseph Song, Giorgio Topa, and Giovanni L. Violante, "Mismatch Unemployment," American Economic Review 104, no. 11 (November 2014): 3529-64.

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