Mismatch

Robert Shimer

No 11888, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper develops a dynamic model of mismatch. Workers and jobs are randomly assigned to labor markets. Each labor market clears at each instant but some labor markets have more workers than jobs, hence unemployment, and some have more jobs than workers, hence vacancies. As workers and jobs move between labor markets, some unemployed workers find vacant jobs and some employed workers lose or leave their job and become unemployed. The model is quantitatively consistent with the comovement of unemployment, job vacancies, and the rate at which unemployed workers find jobs over the business cycle. It can also address a variety of labor market phenomena, including duration dependence in the job finding probability and employer-to-employer transitions, and it helps explain the cyclical volatility of vacancies and unemployment.

JEL-codes: E24 J63 J64 (search for similar items in EconPapers)
Date: 2005-12
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mac
Note: EFG LS
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Citations: View citations in EconPapers (4)

Published as Robert Shimer, 2006. "Mismatch," Proceedings, Federal Reserve Bank of San Francisco.
Published as Robert Shimer, 2007. "Mismatch," American Economic Review, American Economic Association, vol. 97(4), pages 1074-1101, September.

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Related works:
Journal Article: Mismatch (2007)
Journal Article: Mismatch (2006)
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