DP12972 Accounting for Mismatch Unemployment

Author(s): Benedikt Herz, Thijs van Rens
Publication Date: June 2018
Keyword(s): job mobility, mismatch, structural unemployment, worker mobility
JEL(s): E24, J61, J62
Programme Areas: Labour Economics, Monetary Economics and Fluctuations, Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12972

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.