{"title":"Mismatch unemployment during COVID-19 and the post-pandemic labor shortages","authors":"Serdar Birinci , Yusuf Mercan , Kurt See","doi":"10.1016/j.jedc.2025.105142","DOIUrl":null,"url":null,"abstract":"<div><div>We examine the extent to which mismatch unemployment—employment losses relative to an efficient allocation where the planner can costlessly reallocate unemployed workers across sectors to maximize output—shaped labor market dynamics during the COVID-19 pandemic and the subsequent recovery episode characterized by labor shortages. We find that, for the first time in our sample, mismatch unemployment turned negative at the onset of the pandemic. This result suggests that the efficient allocation of job seekers would involve reallocating workers toward longer-tenure and more-productive jobs, even at the expense of fewer hires. We show that sectoral differences in job separations were the main driver behind this result, while differences in vacancies caused positive mismatch unemployment during the recovery episode. We also establish an empirical link between mismatch unemployment and the surge in the labor cost during the recovery, documenting that sectors with larger mismatch unemployment experienced higher employment cost growth.</div></div>","PeriodicalId":48314,"journal":{"name":"Journal of Economic Dynamics & Control","volume":"178 ","pages":"Article 105142"},"PeriodicalIF":1.9000,"publicationDate":"2025-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economic Dynamics & Control","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0165188925001083","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
We examine the extent to which mismatch unemployment—employment losses relative to an efficient allocation where the planner can costlessly reallocate unemployed workers across sectors to maximize output—shaped labor market dynamics during the COVID-19 pandemic and the subsequent recovery episode characterized by labor shortages. We find that, for the first time in our sample, mismatch unemployment turned negative at the onset of the pandemic. This result suggests that the efficient allocation of job seekers would involve reallocating workers toward longer-tenure and more-productive jobs, even at the expense of fewer hires. We show that sectoral differences in job separations were the main driver behind this result, while differences in vacancies caused positive mismatch unemployment during the recovery episode. We also establish an empirical link between mismatch unemployment and the surge in the labor cost during the recovery, documenting that sectors with larger mismatch unemployment experienced higher employment cost growth.
期刊介绍:
The journal provides an outlet for publication of research concerning all theoretical and empirical aspects of economic dynamics and control as well as the development and use of computational methods in economics and finance. Contributions regarding computational methods may include, but are not restricted to, artificial intelligence, databases, decision support systems, genetic algorithms, modelling languages, neural networks, numerical algorithms for optimization, control and equilibria, parallel computing and qualitative reasoning.