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Education, Mismatch And Unemployment

Author

Listed:
  • Gianluca Femminis

    (Dipartimento di Economia e Finanza, Universita` Cattolica del Sacro Cuore, Milano)

  • Giulio Piccirilli

    (Universitas Mercatorum, Roma)

Abstract

We study an economy where the labour market is plagued with search imperfections and is segmented along a set of professions. To enter a profession, workers need to undertake a specific educational investment. At the time of the investment, however, workers are imperfectly informed on the outlook offered by any profession as they only observe a private and a public signal concerning this outlook. We show that imperfect information induces misallocation of labour across professions and increases the rate of unemployment. We also show that, contrary to the policy advice of some labour market observers, an increase in the precision of the public signal does not necessarily lead to a reduction in the rate of unemployment.

Suggested Citation

  • Gianluca Femminis & Giulio Piccirilli, 2019. "Education, Mismatch And Unemployment," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 127(3), pages 285-312.
    • Handle: RePEc:vep:journl:y:2019:v:127:i:3:p:285-312
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    More about this item

    Keywords

    Returns to Education; Occupational Choice; Information Processing;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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