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Real Wages, Skill Mismatch and Unemployment Persistence


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  • SNEESSENS, Henri R.

    (IRES, Departement des Sciences Economiques, Universite catholique de Louvain)

  • SHADMAN-MEHTA, Fatemeh

    (IRES, Departement des Sciences Economiques, Universite catholique de Louvain)


We develop a model of equilibrium unemployment with endogenous real wages and productivity. We use a framework with explicit quantity constraints and aggregation over micromarkets to derive a Beveridge curve and discuss the relationship between shifts in the Beveridge curve and equilibrium unemployment. We also distinguish skilled and unskilled labor, so that shifts in the aggregate UV-curve can be the outcome of either frictions on the skilled labor market or skill mismatch. Frictions are assumed to be exogenous and are estimated by a linear trend. Skill mismatch is endogenous and depends, a.o., on the skilled/unskilled relative wage. There is a tight relationship and interaction between skill mismatch and equilibrium unemployment. We estimate the model on French annual data, over the period 1962-89. We exploit these results to propose tentative explanations of observed unemployment rises and Beveridge curve shifts, and to discuss a few economic policy options .

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1994050.

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Date of creation: 01 Oct 1994
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Handle: RePEc:cor:louvco:1994050

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Cited by:
  1. Nicolas Carnot & Alain Quinet, 2003. "Enrichissement de la croissance en emploi et productivité," Recherches économiques de Louvain, De Boeck Université, vol. 69(1), pages 97-118.
  2. Nicolas CARNOT & Alain QUINET, 2003. "Enrichissement de la croissance en emploi et productivité," Discussion Papers (REL - Recherches Economiques de Louvain) 2003014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  3. repec:spo:wpecon:info:hdl:2441/1646 is not listed on IDEAS
  4. Éric Heyer & Xavier Timbeau, 2000. "35 heures : réduction réduite," Revue de l'OFCE, Programme National Persée, vol. 74(1), pages 53-95.
  5. Falk, Martin & Koebel, Bertrand M., 1997. "The Demand of Heterogeneous Labour in Germany," ZEW Discussion Papers 97-28, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. repec:ebl:ecbull:v:30:y:2010:i:1:p:374-382 is not listed on IDEAS


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