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Events of Department of Economics

May 2, 2019 at 12:30
Seminar Room 5.e4.sr04 - Via Roentgen 1

Seminar (Joint with the BAFFI CAREFIN)


Mismatch Cycles

Robert Ulbricht (Toulouse School of Economics)



We document new facts about the cyclicality of worker–occupation mismatch in the US. In downturns, under-qualified workers are more likely to lose their jobs, consistent with a cleansing effect of recessions. New hires from unemployment, by contrast, are more mismatched in recessions, and this holds true for over- and under-qualification. To account for the facts, we build a directed search model, with on-the-job learning about worker skills. Skills are multidimensional and workers choose careers (tasks) based on what they believe to be their comparative advantages. In the model, the increase in mismatch of new hires is caused by the cleansing effect. This is because workers subject to cleansing have high propensities to switch careers which due to learning leads to high uncertainty and mismatch.

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