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The wage-mismatch index: A new indicator of labor demand in the job search market

Author

Listed:
  • Taiyo Fukai

    (Faculty of Economics, Gakushuin University)

  • Keisuke Kawata

    (Institute of Social Sciences, University of Tokyo)

  • Mizuki Komura

    (School of Economics, Kwansei Gakuin University)

  • Takahiro Toriyabe

    (Graduate School of Economics, Hitotsubashi University)

Abstract

Motivated by persistent labor shortages in developed economies, this study proposes a novel indicator of labor demand, the wage-mismatch index, which captures wage-related mismatches often overlooked by conventional metrics such as vacancy counts or labor market tightness. The index is defined as the share of job postings offering wages acceptable to job seekers. As a case application, we construct an index using administrative data from Japan's public employment service. We further decompose this into its underlying components to identify the sources of change over time. Finally, we demonstrate its empirical relevance by using aggregate data from Tokyo and Osaka, Japan's two largest metropolitan labor markets.

Suggested Citation

  • Taiyo Fukai & Keisuke Kawata & Mizuki Komura & Takahiro Toriyabe, 2025. "The wage-mismatch index: A new indicator of labor demand in the job search market," Discussion Paper Series 296, School of Economics, Kwansei Gakuin University.
    • Handle: RePEc:kgu:wpaper:296
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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