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Mismatch Cycles

  • Location
    Erasmus University Rotterdam, E-Building, Room EB-12
  • Date

    March 27, 2019


We document new facts about the cyclicality of worker–occupation mismatch in the US. In downturns, under-qualified workers are more likely to lose their jobs, consistent with the cleansing effect of recessions. Surprisingly, new hires from unemployment are also more mismatched in recessions, and this holds true for over- and under-qualification. We build a directed search model, with on-the-job learning about worker skills. Skills are multidimensional and workers select into careers (tasks) based on what they believe to be their comparative advantages. The model explains, simultaneously, the empirical patterns on mismatch and career switching.

with Isaac Baley (UPF) and Robert Ulbritch (TSE)