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Job Polarization, Skill Mismatch and the Great Recession

Riccardo Zago

Working papers from Banque de France

Abstract: This paper shows that job polarization has a persistent negative effect on employment opportunities, labor mobility and skill-to-job match quality for mid/low-skilled workers, in particular during downturns. I introduce a model generating an endogenous mapping between skills and jobs, that I estimate to match solely occupational dynamics during the Great Recession, a major episode of polarization in the US economy. Yet, this is sufficient for the model to replicate well the reallocation patterns of all workers on the job ladder and the mismatch dynamics observed in the data. Comparison with the planner solution reveals that 1/4 of mismatches is efficient and attenuates polarization and unemployment over the cycle.

Keywords: : Job Polarization; Business Cycle; Job Quality; Skill Demand. (search for similar items in EconPapers)
JEL-codes: E24 E32 J21 J24 J62 O33 (search for similar items in EconPapers)
Pages: 69 pages
Date: 2020
New Economics Papers: this item is included in nep-dge, nep-mac and nep-ore
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