Two studies provide insights into how much the mismatch between job requirements and applicant skill levels may explain the dramatic rise in unemployment since 2006.
The authors conclude that skill mismatches across industries and occupations explains at most one-third of the total observed increase in the unemployment rate, whereas geographical mismatch plays no apparent role.
In the articles below, the authors concluded that the share of the rise in unemployment explained by occupational mismatch is increasing at the education level.
1. Ayseguel Sahin et al, "Mismatch Unemployment," National Bureau of Economic Research (NBER) Working Paper 18265, August 2012, and
2. Bart Hobijin, "The Industry-Occupation Mix of U.S. Job Openings and Hires,” Federal Reserve (FRB) of San Francisco, Working Paper 2012-09, July 2012.
Both studies primarily use the U.S. Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover Survey (JOLTS) and the private sector Conference Board’s Help-Wanted OnLine (HWOL) data, plus data from the Current Population Survey (CPS) and other BLS surveys.
Major Findings on Skill Mismatches and Job Vacancy Surveys
1. The rates at which unemployed individuals become “discouraged workers” (i.e., stop looking for work and are no longer officially counted as unemployed) are very similar across industries and occupations.
2. For all industries and occupations, less than 45 percent of all hires previously worked in the same industry or occupation. Construction industries and occupations were most likely to hire individuals with industry or occupation-specific experience.
3. A comparison of JOLTS and the state-specific job vacancy surveys showed that JOLTS measured on average 4 percent more job openings.
4. The vast majority of online job ads appear on relatively few sites. About 60 percent of all ads appeared on five sites (CareerBuilder, Craigslist, JOBcentral, Monster, and Yahoo!HotJobs), and some 70 percent were on nine sites (but be aware of counting duplicative job ads).
5. State job vacancy surveys vary considerably in their sampling design. In 2011, all six of the states that used a survey instrument and methodology similar to that provided by the National Job Vacancy Workshop collected information on both industries and occupations, although the industry classifications were not as detailed as in JOLTS.
6. JOLTS and HWOL possess relative strengths and weaknesses compared to each other. JOLTS, as a survey of business establishments, collects industry information for all participating establishments, but collects no occupational data. HWOL only counts online ads, but permits extensive geographical detail, collecting occupational data on most of the postings and limited industry data.