Mismatch Explanations of European Unemployment A Critical Evaluation [Paperback]

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.1. Introduction.- 1.1. European Unemployment and the Mismatch Hypothesis.- 1.2. The Conceptual Framework followed in this Book.- 1.3. Overview and Results.- 2. Do Aggregate Measures of Mismatch Measure Mismatch? A Time Series Analysis of Existing Concepts.- 2.1. Introduction.- 2.2. Some Puzzling Evidence.- 2.3. Measuring Mismatch: Theoretical Foundations.- 2.4. Measurement Problems.- 2.5. Disaggregation and Unobserved Heterogeneity.- 2.6. Time Series Analysis.- 2.7. Testing for Unit Roots.- 2.8. On the Magnitude of Drifts in Macroeconomic Mismatch Time Series.- 2.9. Some Simulation Experiments.- 2.10. Concluding Remarks.- Appendix A2.- 3. Disaggregate Matching Functions, Spurious Mismatch and Occupational Reallocation in Germany.- 3.1. Introduction.- 3.2. Aggregate Matching Functions: Theoretical Framework.- 3.3. Aggregate Matching Functions in West Germany.- 3.4. Spurious Matching Functions.- 3.4.1. The Econometric Theory of Spurious Matching Functions.- 3.4.2. Simulated Evidence.- 3.5. Disaggregate Matching Functions using a Panel of Occupational Groups.- 3.5.1. Occupational UV-curves.- 3.5.2. Nonsense Regressions with Panel Data?.- 3.5.3. Panel Data Estimations for Disaló@