Mismatch Explanations Of European Unemployment

The peristence of European unemployment stands in striking contrast to the cyclical pattern of unemployment in the US. Many people attribute the rise in European unemployment to increased imbalances between the pattern of labour demand and supply - in other words, to greater mismatch, but existing mismatch indicators do not support this view. However, the obvious inference is not legitimate because the evidence is based on trended data, and thus gives rise to spurious statistical results. To get around the problem, the author uses the dynamic flow approach to structural unemployment and disaggregated data. The reader will find new results on "non-spurious" mismatch tendencies, occupational reallocation, the matching of apprentices, and the importance of matching and mobility for wage differentials.

Unemployment is the most serious economic and social problem in Europe today. Although the extent varies from region to region, it is generally most extreme in large cities. This volume asks why European unemployment is so high and examines the policies adopted at local, national and European level to tackle the problems. It also includes five case

The debate on the free movement of labour within the EU has gained new momentum in the wake of the economic crisis. Building on the earlier Ashgate publication EU Labour Migration Since Enlargement, the editors have assembled a team of experts from across Europe to shed light on the critical issues raised by internal labour mobility within the EU in the context of economic crisis and labour market pressures. The book's chapters tease out the links between economic developments, regulatory frameworks and migration patterns in different European countries. A central focus is on issues of skills and skills mismatch and how they relate to migration forms, duration and individual decisions to stay or return. Based on detailed analysis of European and national-level sources, the results presented clearly contradict assumptions about a "knowledge driven migration". Rather, over-qualification and the corresponding underutilisation of migrant workers' skills emerge as a pervasive phenomenon. At the same time the characteristics of migrants - not just skills, but socio-demographic characteristics and attitudes - and also their labour market integration are shown to be very diverse and to vary substantially between different sending and receiving countries. This calls for a differentiated analysis and raises complex issues for policymakers. Examples where policy has contributed to positive outcomes for both migrants and domestic workforces are identified. Unique in analysing labour migration flows within the European Union in a comparative manner putting skills into the centre and taking account of the effects of the economic crisis, while addressing policy concerns this is a valuable resource for academics, policymakers and practitioners alike.

Since the mid-1970s Spain has suffered from persistently high unemployment, as it has occurred in other parts of Europe. Although during the last few years the unemployment level has declined, there are still enormous disparities in the unemployment rate across groups, skills and regions. This thesis attempts to shed some light on the mechanisms of unemployment persistence and skill and regional mismatch in Spain. Chapter 1 provides a first introductory analysis of Spanish data. The chapter emphasises the importance of skill and regional mismatch, which may have contributed about fifty percent to the observed increase in total unemployment over the last twenty years. The chapter also studies the cyclical pattern in the Spanish unemployment, which is a very important aspect in view of its magnitude. The following three chapters are devoted to the evaluation of different mechanisms that may have been at work. In all three chapters, the analysis relies on the specification, calibration and simulation of dynamic general equilibrium models with matching on the labour market. Chapter 2 focuses on cyclical fluctuations, with particular emphasis on the role of reallocation shocks. Chapter 3 focuses on « skill mismatch »; more precisely the chapter investigates to what extent unemployment rate disparities across skill groups can be explained in terms of a « ladder effect ». Chapter 4 focuses on regional disparities. A model is built to investigate the possible determinants of regional disparities and the role of labour mobility.

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 1/3 of the total observed increase in the unemployment rate, whereas geographical mismatch plays no apparent role. The share of the rise in unemployment explained by occupational mismatch is increasing in the education level.

Covers mainly the period from 1970 to 1993.