Mismatch Explanations Of European Unemployment

The peristence of European unemployment stands in striking contrast to the cyclical pattern of unemployment in the US. Many people attribute the rise in European unemployment to increased imbalances between the pattern of labour demand and supply - in other words, to greater mismatch, but existing mismatch indicators do not support this view. However, the obvious inference is not legitimate because the evidence is based on trended data, and thus gives rise to spurious statistical results. To get around the problem, the author uses the dynamic flow approach to structural unemployment and disaggregated data. The reader will find new results on "non-spurious" mismatch tendencies, occupational reallocation, the matching of apprentices, and the importance of matching and mobility for wage differentials.

Since the mid-1970s Spain has suffered from persistently high unemployment, as it has occurred in other parts of Europe. Although during the last few years the unemployment level has declined, there are still enormous disparities in the unemployment rate across groups, skills and regions. This thesis attempts to shed some light on the mechanisms of unemployment persistence and skill and regional mismatch in Spain. Chapter 1 provides a first introductory analysis of Spanish data. The chapter emphasises the importance of skill and regional mismatch, which may have contributed about fifty percent to the observed increase in total unemployment over the last twenty years. The chapter also studies the cyclical pattern in the Spanish unemployment, which is a very important aspect in view of its magnitude. The following three chapters are devoted to the evaluation of different mechanisms that may have been at work. In all three chapters, the analysis relies on the specification, calibration and simulation of dynamic general equilibrium models with matching on the labour market. Chapter 2 focuses on cyclical fluctuations, with particular emphasis on the role of reallocation shocks. Chapter 3 focuses on « skill mismatch »; more precisely the chapter investigates to what extent unemployment rate disparities across skill groups can be explained in terms of a « ladder effect ». Chapter 4 focuses on regional disparities. A model is built to investigate the possible determinants of regional disparities and the role of labour mobility.

We develop an equilibrium search-matching model with risk-neutral agents and two-sided ex-ante heterogeneity Unemployment insurance has the standard effect of reducing employment, but also helps workers to get a suitable job. The predictions of our simple model are consistent with the contrasting performance of the labor market in Europe and US in terms of unemployment, productivity growth and wage inequality. To show this, we construct two fictitious economies with calibrated parameters which only differ by the degree of unemployment insurance and assume that they are hit by a common technological shock which enhances the importance of mismatch. This shock reduces the proportion of jobs which workers regard as acceptable in the economy with unemployment insurance (Europe). As a result, unemployment doubles in this economy. In the laissez-faire economy (US), unemployment remains constant, but wage inequality increases more and productivity grows less due to larger mismatch. The model can be used to address a number of normative issues.

The purpose of this paper is to investigate some of the main drivers of high unemployment rates in the European Union countries starting from two sources highlighted in the economic literature: the shortfall of the aggregate demand and the increasing labour market mismatches. Our analysis is based on a panel database and focuses on two objectives: to measure the long and short-term impact of GDP growth on unemployment over recent years for different categories of labour market participants (young, older and low educated workers) and to evaluate the relationship between mismatches related to skills (educational and occupational) and unemployment. One of the main conclusions is that unemployment rates of young and low educated workers are more responsive to economic growth variations both in the long and short run, while unemployment rates of older workers show a greater capacity of adjustment. In addition, occupational mismatches seem to have a significant long-term impact on the changes in unemployment of all categories of unemployed, whereas the short run effect is rather mixed, varying across countries. One explanation is the fact that during crisis, economy's structure tends to change more rapidly than labour market and educational system can adapt.

Unemployment in Europe asks why European unemployment is so high and examines the policies adopted at local, national and European level to tackle the problems. It includes case studies of five major European cities with high unemployment.

Examines the main factors influencing unemployment at both an aggregate level and at an individual level and assesses the role of policies to bring unemployment down.

The debate on the free movement of labour within the EU has gained new momentum in the wake of the economic crisis. Building on the earlier Ashgate publication EU Labour Migration Since Enlargement, the editors have assembled a team of experts from across Europe to shed light on the critical issues raised by internal labour mobility within the EU in the context of economic crisis and labour market pressures. The book's chapters tease out the links between economic developments, regulatory frameworks and migration patterns in different European countries. A central focus is on issues of skills and skills mismatch and how they relate to migration forms, duration and individual decisions to stay or return. Based on detailed analysis of European and national-level sources, the results presented clearly contradict assumptions about a "knowledge driven migration". Rather, over-qualification and the corresponding underutilisation of migrant workers' skills emerge as a pervasive phenomenon. At the same time the characteristics of migrants - not just skills, but socio-demographic characteristics and attitudes - and also their labour market integration are shown to be very diverse and to vary substantially between different sending and receiving countries. This calls for a differentiated analysis and raises complex issues for policymakers. Examples where policy has contributed to positive outcomes for both migrants and domestic workforces are identified. Unique in analysing labour migration flows within the European Union in a comparative manner putting skills into the centre and taking account of the effects of the economic crisis, while addressing policy concerns this is a valuable resource for academics, policymakers and practitioners alike.

This study reviews recent policies and practices aiming to tackle unemployment through addressing skill mismatch in the EU-28 Member States. It examines skill mismatch policy instruments aimed at reducing unemployment as well as measures to prevent it. While much research and analysis on mismatch exists elsewhere, it is the first comprehensive study that maps actual skill mismatch policies and practices in the EU. In-depth case studies help identify promising features of policy practices and contribute to better understanding of impact. The lessons support policy learning and can help Member States shape policies with a stronger focus on matching and pave the way for policy agendas that put skill matching centre stage.

Seminar paper from the year 2013 in the subject Economics - Job market economics, grade: 1,7, Heriot-Watt University Edinburgh (School of Management and Languages), language: English, abstract: Considering the ILO reporting 6.00% unemployment rate for the world in 2012 (ILO Report 2013), it is obvious that unemployment is a commonly observed phenomenon. Chart 1 displays the devel-opment of the unemployment rate for 20 OECD countries2 from 1955 until 2011. The average of all these countries in 2011 was 7.67%; of the EU 15 alone was 8.41%. In order to explain why unemployment occurs, the first part of this essay will deal with the different general theories of unemployment. Following this, the specific issue of European unemployment will be treated in the second part. This essay will conclude then with the author ́s estimation which theory explains European unemployment best.