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Mismatch unemployment

We develop a framework where mismatch between vacancies and job seekers across sectors translates into higher unemployment by lowering the aggregate job-finding rate. We use this framework to measure the contribution of mismatch to the recent rise in U.S. unemployment by exploiting two sources of cross-sectional data on vacancies, JOLTS and HWOL. Our calculations indicate that mismatch, across industries and 3-digit occupations, explains at most 1/3 of the total observed increase in the unemployment rate. Occupational mismatch has become especially more severe for college graduates, and in the West of the United States. Geographical mismatch unemployment plays no apparent role.