IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/12972.html
   My bibliography  Save this paper

Accounting for Mismatch Unemployment

Author

Listed:
  • van Rens, Thijs
  • Herz, Benedikt

Abstract

We investigate unemployment due to mismatch in the United States over the past three and a half decades. We propose an accounting framework that allows us to estimate the contribution of each of the frictions that generated labor market mismatch. Barriers to job mobility account for the largest part of mismatch unemployment, with a smaller role for barriers to worker mobility. We find little contribution of wage-setting frictions to mismatch.

Suggested Citation

  • van Rens, Thijs & Herz, Benedikt, 2018. "Accounting for Mismatch Unemployment," CEPR Discussion Papers 12972, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12972
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP12972
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Regis Barnichon & Andrew Figura, 2015. "Labor Market Heterogeneity and the Aggregate Matching Function," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(4), pages 222-249, October.
    2. Peter Diamond, 2011. "Unemployment, Vacancies, Wages," American Economic Review, American Economic Association, vol. 101(4), pages 1045-1072, June.
    3. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    4. Erica L. Groshen & Simon M. Potter, 2003. "Has structural change contributed to a jobless recovery?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Aug).
    5. Ay?egül ?ahin & Joseph Song & Giorgio Topa & Giovanni L. Violante, 2014. "Mismatch Unemployment," American Economic Review, American Economic Association, vol. 104(11), pages 3529-3564, November.
    6. Haefke, Christian & Sonntag, Marcus & van Rens, Thijs, 2013. "Wage rigidity and job creation," Journal of Monetary Economics, Elsevier, vol. 60(8), pages 887-899.
    7. Marianna Kudlyak, 2011. "The cyclicality of the user cost of labor with search and matching," Working Paper 09-12, Federal Reserve Bank of Richmond.
    8. Carlos Carrillo‐Tudela & Ludo Visschers, 2023. "Unemployment and Endogenous Reallocation Over the Business Cycle," Econometrica, Econometric Society, vol. 91(3), pages 1119-1153, May.
    9. David Wiczer, 2013. "Long-term Unemployment: Attached and Mismatched?," 2013 Meeting Papers 1101, Society for Economic Dynamics.
    10. Robert Shimer, 2012. "Reassessing the Ins and Outs of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 127-148, April.
    11. Michael W. L. Elsby & Bart Hobijn & Aysegul Sahin, 2010. "The Labor Market in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 1-69.
    12. Fernando Alvarez & Robert Shimer, 2011. "Search and Rest Unemployment," Econometrica, Econometric Society, vol. 79(1), pages 75-122, January.
    13. Jacob Wong, 2012. "Aggregate Reallocation Shocks and the Dynamics of Occupational Mobility and Wage Inequality," School of Economics and Public Policy Working Papers 2012-04, University of Adelaide, School of Economics and Public Policy.
    14. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
    15. Kudlyak, Marianna, 2014. "The cyclicality of the user cost of labor," Journal of Monetary Economics, Elsevier, vol. 68(C), pages 53-67.
    16. Gary Solon & Ryan Michaels & Michael W. L. Elsby, 2009. "The Ins and Outs of Cyclical Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 84-110, January.
    17. Lilien, David M, 1982. "Sectoral Shifts and Cyclical Unemployment," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 777-793, August.
    18. Raven Molloy & Christopher L. Smith & Riccardo Trezzi & Abigail Wozniak, 2016. "Understanding Declining Fluidity in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 183-259.
    19. Francesco Furlanetto & Nicolas Groshenny, 2016. "Mismatch Shocks and Unemployment During the Great Recession," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(7), pages 1197-1214, November.
    20. Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, vol. 72(5), pages 968-979, December.
    21. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2007. "Business Cycle Accounting," Econometrica, Econometric Society, vol. 75(3), pages 781-836, May.
    22. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-690, September.
    23. Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
    24. Robert E. Hall, 2009. "Reconciling Cyclical Movements in the Marginal Value of Time and the Marginal Product of Labor," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 281-323, April.
    25. Arthur J. Hosios, 1990. "On The Efficiency of Matching and Related Models of Search and Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(2), pages 279-298.
    26. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    27. Marcus Hagedorn & Iourii Manovskii, 2008. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited," American Economic Review, American Economic Association, vol. 98(4), pages 1692-1706, September.
    28. Ioana Marinescu & Roland Rathelot, 2018. "Mismatch Unemployment and the Geography of Job Search," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(3), pages 42-70, July.
    29. 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.
    30. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    31. Edward P. Lazear & James R. Spletzer, 2012. "The United States labor market: status quo or a new normal?," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 405-451.
    32. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
    33. Thomas A. Lubik, 2013. "The shifting and twisting Beveridge curve: an aggregate perspective," Working Paper 13-16, Federal Reserve Bank of Richmond.
    34. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    35. Régis Barnichon & Andrew Figura, 2010. "What drives movements in the unemployment rate? a decomposition of the Beveridge curve," Finance and Economics Discussion Series 2010-48, Board of Governors of the Federal Reserve System (U.S.).
    36. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
    37. Katharine G. Abraham, 1987. "Help-Wanted Advertising, Job Vacancies, and Unemployment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(1), pages 207-248.
    38. Herz, Benedikt, 2017. "Specific Human Capital and Wait Unemployment," MPRA Paper 76777, University Library of Munich, Germany.
    39. Greg Kaplan & Sam Schulhofer-Wohl, 2011. "A sharp drop in interstate migration? not really," Economic Policy Paper 11-2, Federal Reserve Bank of Minneapolis.
    40. Gueorgui Kambourov & Iourii Manovskii, 2008. "Rising Occupational And Industry Mobility In The United States: 1968-97," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 41-79, February.
    41. James D. Montgomery, 1991. "Equilibrium Wage Dispersion and Interindustry Wage Differentials," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(1), pages 163-179.
    42. Henry S. Farber & Bruce Western, 2002. "Ronald Reagan and the Politics of Declining Union Organization," British Journal of Industrial Relations, London School of Economics, vol. 40(3), pages 385-401, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wolcott, Erin L., 2021. "Employment inequality: Why do the low-skilled work less now?," Journal of Monetary Economics, Elsevier, vol. 118(C), pages 161-177.
    2. David G. Blanchflower & Andrew J. Oswald, 2013. "Does High Home-Ownership Impair the Labor Market?," NBER Working Papers 19079, National Bureau of Economic Research, Inc.
    3. Bhuller, Manudeep & Kostøl, Andreas & Vigtel, Trond Christian, 2019. "How Broadband Internet Affects Labor Market Matching," Memorandum 10/2019, Oslo University, Department of Economics.
    4. Federico Di Pace & Matthias Hertweck, 2019. "Labor Market Frictions, Monetary Policy, and Durable Goods," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 32, pages 274-304, April.
    5. Ioana Marinescu & Roland Rathelot, 2018. "Mismatch Unemployment and the Geography of Job Search," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(3), pages 42-70, July.
    6. Simon Mongey & Giovanni L. Violante, 2019. "Macro Recruiting Intensity from Micro Data," NBER Working Papers 26231, National Bureau of Economic Research, Inc.
    7. Georgios Angelis & Yann Bramoullé, 2023. "The Matching Function: A Unified Look into the Black Box," Working Papers hal-04136688, HAL.
    8. Stefano Banfi & Benjamin Villena-Roldan & Sekyu Choi, 2018. "Deconstructing job search behavior," 2018 Meeting Papers 368, Society for Economic Dynamics.
    9. Altmann, Steffen & Mahlstedt, Robert & Rattenborg, Malte Jacob & Sebald, Alexander, 2023. "Which Occupations Do Unemployed Workers Target? Insights from Online Job Search Profiles," IZA Discussion Papers 16696, Institute of Labor Economics (IZA).
    10. Yuelin Liu, 2022. "How structural is unemployment in the United States?," Economic Inquiry, Western Economic Association International, vol. 60(3), pages 1258-1276, July.
    11. Lalé, Etienne, 2017. "Worker reallocation across occupations: Confronting data with theory," Labour Economics, Elsevier, vol. 44(C), pages 51-68.
    12. Roland Rathelot & Thijs van Rens & See-Yu Chan, 2023. "Rethinking the skills gap," IZA World of Labor, Institute of Labor Economics (IZA), pages 3912-3912, November.
    13. Balleer, Almut, 2023. "Comment on “Sectoral shocks, reallocation, and labor market policies” by Joaquín García-Cabo, Anna Lipińska, and Gastón Navarro," European Economic Review, Elsevier, vol. 157(C).
    14. Claudia Macaluso, 2023. "Skill Remoteness and Post-Layoff Labor Market Outcomes," CESifo Working Paper Series 10845, CESifo.
    15. Jung, Philip & Korfmann, Philipp & Preugschat, Edgar, 2023. "Optimal regional labor market policies," European Economic Review, Elsevier, vol. 152(C).
    16. Georgios Angelis & Yann Bramoullé, 2023. "The Matching Function: A Unified Look into the Black Box," AMSE Working Papers 2315, Aix-Marseille School of Economics, France.
    17. Claudia Macaluso, 2017. "Skill Remoteness and Post-layoff Labor Market Outcomes," 2017 Meeting Papers 569, Society for Economic Dynamics.
    18. Consolo, Agostino & Petroulakis, Filippos, 2022. "Did COVID-19 induce a reallocation wave?," Working Paper Series 2703, European Central Bank.
    19. Parkhomenko, Andrii, 2016. "Opportunity to Move: Macroeconomic Effects of Relocation Subsidies," MPRA Paper 75256, University Library of Munich, Germany.
    20. Aristotelis Boukouras, 2016. "Capitalist Spirit and the Markets: Why Income Inequality Matters," Discussion Papers in Economics 16/16, Division of Economics, School of Business, University of Leicester.
    21. Altmann, Steffen & Glenny, Anita Marie & Mahlstedt, Robert & Sebald, Alexander, 2022. "The Direct and Indirect Effects of Online Job Search Advice," IZA Discussion Papers 15830, Institute of Labor Economics (IZA).
    22. Mikhail Simutin & JessieJiaxu Wang & Lars Kuehn, 2014. "A Labor Capital Asset Pricing Model," 2014 Meeting Papers 695, Society for Economic Dynamics.
    23. Kyungho Song & Hyun Kim & Jisoo Cha & Taedong Lee, 2021. "Matching and Mismatching of Green Jobs: A Big Data Analysis of Job Recruiting and Searching," Sustainability, MDPI, vol. 13(7), pages 1-15, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rogerson, Richard & Shimer, Robert, 2011. "Search in Macroeconomic Models of the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 7, pages Pages: 61, Elsevier.
    2. Domenico Ferraro, 2018. "The Asymmetric Cyclical Behavior of the U.S. Labor Market," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 30, pages 145-162, October.
    3. Carlos Carrillo‐Tudela & Ludo Visschers, 2023. "Unemployment and Endogenous Reallocation Over the Business Cycle," Econometrica, Econometric Society, vol. 91(3), pages 1119-1153, May.
    4. Sabine Klinger & Enzo Weber, 2016. "Decomposing Beveridge Curve Dynamics By Correlated Unobserved Components," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 877-894, December.
    5. Wolcott, Erin L., 2021. "Employment inequality: Why do the low-skilled work less now?," Journal of Monetary Economics, Elsevier, vol. 118(C), pages 161-177.
    6. Klinger, Sabine & Weber, Enzo, 2014. "Decomposing Beveridge curve dynamics by correlated unobserved components: The impact of labour market reforms in Germany," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100499, Verein für Socialpolitik / German Economic Association.
    7. Francesco Furlanetto & Nicolas Groshenny, 2016. "Mismatch Shocks and Unemployment During the Great Recession," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(7), pages 1197-1214, November.
    8. Martin Gervais & Nir Jaimovich & Henry E. Siu & Yaniv Yedid‐Levi, 2015. "Technological Learning And Labor Market Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(1), pages 27-53, February.
    9. Pascal Michaillat & Emmanuel Saez, 2015. "Aggregate Demand, Idle Time, and Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(2), pages 507-569.
    10. Yashiv, Eran, 2007. "Labor search and matching in macroeconomics," European Economic Review, Elsevier, vol. 51(8), pages 1859-1895, November.
    11. Kohlbrecher, Britta & Merkl, Christian, 2022. "Business cycle asymmetries and the labor market," Journal of Macroeconomics, Elsevier, vol. 73(C).
    12. Alfonso Arpaia & Aron Kiss & Alessandro Turrini, 2014. "Is unemployment structural or cyclical? Main features of job matching in the EU after the crisis," European Economy - Economic Papers 2008 - 2015 527, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    13. Sergio A. Lago Alves, 2012. "Trend Inflation and the Unemployment Volatility Puzzle," Working Papers Series 277, Central Bank of Brazil, Research Department.
    14. Yaniv Yedid-Levi, 2016. "Why does employment in all major sectors move together over the business cycle?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 22, pages 131-156, October.
    15. Cardullo, Gabriele & Guerci, Eric, 2019. "Interpreting the Beveridge curve. An agent-based approach," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 84-100.
    16. David Wiczer, 2013. "Long-term Unemployment: Attached and Mismatched?," 2013 Meeting Papers 1101, Society for Economic Dynamics.
    17. Sergio A. Lago Alves, 2018. "Monetary Policy, Trend Inflation, and Unemployment Volatility," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(4), pages 637-673, June.
    18. Ryan Chahrour & Sanjay K. Chugh & Tristan Potter, 2014. "Searching for Wages in an Estimated Labor Matching Model," Boston College Working Papers in Economics 867, Boston College Department of Economics, revised 20 Dec 2016.
    19. Michael W. L. Elsby & Ryan Michaels & David Ratner, 2015. "The Beveridge Curve: A Survey," Journal of Economic Literature, American Economic Association, vol. 53(3), pages 571-630, September.
    20. David Andolfatto, 2007. "Search Models of Unemployment," Discussion Papers dp07-01, Department of Economics, Simon Fraser University.

    More about this item

    Keywords

    Mismatch; Structural unemployment; Worker mobility; Job mobility;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:12972. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.