Fed in Print

Abstract

We develop a framework where mismatch between vacancies and job seekers across sectors translates into higher unemployment by lowering the aggregate job-finding rate. We use this framework to measure the contribution of mismatch to the recent rise in U.S. unemployment by exploiting two sources of cross-sectional data on vacancies: JOLTS and HWOL (a new database covering the universe of online U.S. job advertisements). Mismatch across industries and occupations explains at most one-third of the total observed increase in the unemployment rate. Geographical mismatch plays no apparent role. Occupational mismatch has become especially more severe for college graduates, and in the West of the United States.

Aysegül Sahin & Joseph Song & Giorgio Topa & Giovanni L. Violante, Mismatch unemployment, Federal Reserve Bank of New York, Staff Reports 566, 2012, revised 01 Jun 2013.

Note: For a published version of this report, see Ayşegül Şahin, Joseph Song, Giorgio Topa, and Giovanni L. Violante, "Mismatch Unemployment," American Economic Review 104, no. 11 (November 2014): 3529-64.

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
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
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

Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

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