Mismatch, matching and the allocation of workers to jobs (Mismatch)

Abstract:

Our project aims to make the next big push in the understanding of labor market matching by exploiting the Danish administrative data and a novel data source on job vacancies. First, we will create a unique data set containing detailed information on all workers, all firms’ online vacancies, and all hires in the Danish labor market. Second, we will use this new data set to examine congestion effects in the job search across different types of workers and firms. Such heterogeneities in congestion effects have important implications for labor market efficiency and the role of policy. Finally, we will use the new data set to undertake a study of labor market mismatch that explicitly accounts for the fact that mismatch may cause some workers to end up in jobs that are a poor match for their skills. Previous work on mismatch ignores this fact and focuses exclusively on unemployment and may therefore have severely understated the importance of mismatch and the policies to combat it.