Mismatch Explanations of European Unemployment: A Critical Evaluation (European and Transatlantic Studies)

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. Front Matter....Pages I-XI Mismatch Explanations of European Unemployment....Pages 1-10 Do aggregate measures of mismatch measure mismatch? A time series analysis of existing concepts....Pages 11-53 Disaggregate matching functions, spurious mismatch and occupational reallocation in Germany....Pages 55-138 Matching and new technologies: Does unmeasured ability explain the higher wages of new-technology workers?....Pages 139-190 Conclusions....Pages 191-195 Back Matter....Pages 197-206 Examining the sources of European unemployment, this work asks whether the mismatch hypothesis is valid. Introducing the theory of spurious mismatch trends, the author explains the basics in a straightforward manner.