Mismatch on the Dutch labour market in the Great Recession

Hugo Erken, Eric van Loon and Wouter Verbeek

No 303, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: The Great Recession has caused unemployment in the Netherlands to rise from 3.1% in 2008 to over 7% at the beginning of 2014. Structural imbalances caused by labour mismatch could be one of the explanations underlying this high rate. The goal of this paper is to examine this hypothesis. We adopt an eclectic approach to study if mismatch has increased during the Great Recession. First, we examine the development of the Beveridge curve. We estimate so-called “steady-state” Beveridge curves based on underlying labour market flows. Outward shifts of these curves are associated with decreasing matching efficiency. Second, we construct a mismatch index which enables us to calculate the contribution of sector mismatch to the unemployment level. Our analyses show little support for the hypothesis that mismatch currently is a problem on the Dutch labour market. At the aggregate level, the Beveridge curve has not shifted outwards. Furthermore, at most one-seventh of Dutch unemployment can be attributed to sector mismatch, which is comparable to or below periods prior to the Great Recession.

JEL-codes: E20 E24 J63 J69 (search for similar items in EconPapers)
Date: 2015-02
New Economics Papers: this item is included in nep-lab, nep-mac and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:303

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