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Labor mismatch in the Great Recession: a review of indexes using recent U.S. data

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  • Maria E. Canon
  • Mingyu Chen
  • Elise Marifian

Abstract

Labor mismatch, also known as structural imbalance, can be defined as a poor match between the characteristics of unemployed workers and those required for vacant jobs. In the wake of the jobless recovery from the Great Recession, economists have sought to explain the coexistence of a high unemployment rate and increasing job openings as a mismatch phenomenon. This article reviews five studies that have contributed to the development of mismatch indexes and computes the corresponding indexes over the period May 2005–May 2012 using job vacancy data from the Conference Board Help Wanted OnLine® (HWOL) Data Series. For most of the indexes, mismatch increased during the Great Recession, although the indexes exhibit a range of behaviors. According to an index developed in Jackman and Roper (1987), mismatch can account for at most 2.72 percentage points of the 5.30-percentage-point increase in the unemployment rate from the beginning of the recession to the unemployment rate peak.

Suggested Citation

  • Maria E. Canon & Mingyu Chen & Elise Marifian, 2013. "Labor mismatch in the Great Recession: a review of indexes using recent U.S. data," Review, Federal Reserve Bank of St. Louis, issue May, pages 237-272.
  • Handle: RePEc:fip:fedlrv:y:2013:i:may:p:237-272:n:v.95no.3
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    References listed on IDEAS

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    1. Nir Jaimovich & Henry E. Siu, 2012. "The Trend is the Cycle: Job Polarization and Jobless Recoveries," NBER Working Papers 18334, National Bureau of Economic Research, Inc.
    2. Henry S. Farber & Robert G. Valletta, 2015. "Do Extended Unemployment Benefits Lengthen Unemployment Spells?: Evidence from Recent Cycles in the U.S. Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 50(4), pages 873-909.
    3. Abraham, Katharine G & Katz, Lawrence F, 1986. "Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 507-522, June.
    4. Ferreira, Fernando & Gyourko, Joseph & Tracy, Joseph, 2010. "Housing busts and household mobility," Journal of Urban Economics, Elsevier, vol. 68(1), pages 34-45, July.
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    Cited by:

    1. Hugo Erken & Eric Loon & Wouter Verbeek, 2015. "Mismatch on the Dutch Labour Market in the Great Recession," De Economist, Springer, vol. 163(4), pages 435-459, December.
    2. repec:rfe:zbefri:v:35:y:2017:i:1:p:13-44 is not listed on IDEAS
    3. Hugo Erken & Eric van Loon & Wouter Verbeek, 2015. "Mismatch on the Dutch labour market in the Great Recession," CPB Discussion Paper 303, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Hutter, Christian & Weber, Enzo, 2014. "Forecasting with a mismatch-enhanced labor market matching function," IAB Discussion Paper 201416, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. repec:bla:obuest:v:79:y:2017:i:1:p:101-123 is not listed on IDEAS

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    Keywords

    Labor market ; Recessions ; Unemployment;

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