Occupational Mobility and Mismatch Unemployment
BİLGE ERİŞ DERELİ
DECEMBER 18, 2019
Abstract: As the structure of labor demand changes, groups of workers (e.g. metal workers in the Rust Belt) face persistent unemployment unless they change occupation. We document that such occupational mismatch is responsible for 1/10 to 1/5th of aggregate unemployment in the US and other countries (UK, Germany, Turkey). We also document that over half of all unemployed workers find a job in a different occupation than they were previously employed in. However, this high level of occupational mobility among the unemployed, does nothing to bring down unemployment due to occupational mismatch. What explains this apparent puzzle, is that -on average- unemployed workers switch to occupations where the probability to find a job is no larger than in their previous occupation.