Was there mismatch unemployment during the Great Recession?

I remember this question being debated extensively circa 2009-2011, and those who said there was a (limited) role for mismatch unemployment were mocked pretty mercilessly.  Well, Sahin, Song, Topa, and Violante have a piece in the new American Economic Review entitled “Mismatch Unemployment.”  (You can find various versions here.)  It’s pretty thorough and state of the art.  Their conclusion:? “…mismatch, across industries and three-digit occupations, explains at most one-third of the total observed increase in the unemployment rate.”  The people thrown out of work could not be matched as well as the unemployed workers of the past.


Much of the matching problem was for skilled workers, college graduates, and in the Western part of the country.  Geographical mismatch unemployment did not appear to be significant.  Now, “at most one-third” is not the main problem, but it is not small beans either.  That’s a lot of people out of work because of matching problems.


Again, the Great Recession arose from a confluence of supply and demand problems.


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Published on October 30, 2014 23:45
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