Using job vacancies to understand the effects of labour market mismatch on UK output and productivity

Arthur Turrell, Bradley Speigner (), Jyldyz Djumalieva (), David Copple () and James Thurgood ()
Additional contact information
Bradley Speigner: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH
Jyldyz Djumalieva: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH
David Copple: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH
James Thurgood: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH

No 737, Bank of England working papers from Bank of England

Abstract: Mismatch in the labour market has been implicated as a driver of the UK’s productivity ‘puzzle’, the phenomenon describing how the growth rate and level of UK productivity have fallen behind their respective pre-Great Financial Crisis trends. Using a new dataset of around 15 million job adverts originally posted online, we examine the extent to which eliminating occupational or regional mismatch would have boosted productivity and output growth in the UK in the post-crisis period. To show how aggregate labour market data hide important heterogeneity, we map the naturally occurring vacancy data into official occupational classifications using a novel application of text analysis. The effects of mismatch on aggregate UK productivity and output are driven by dispersion in regional or occupational productivity, tightness, and matching efficiency. We find, contrary to previous work, that unwinding occupational mismatch would have had a weak effect on growth in the post-crisis period. However, unwinding regional mismatch would have substantially boosted output and productivity relative to their realised paths, bringing them in line with their pre-crisis trends.

Keywords: Vacancies; matching; mismatch (search for similar items in EconPapers)
JEL-codes: C55 E24 J63 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2018-07-06
New Economics Papers: this item is included in nep-big, nep-eur, nep-lab and nep-mac
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:0737

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