Skill Mismatch in Equilibrium Unemployment

Ronald Bachmann
We analyse the effect of skill mismatch in a search model of equilibrium unemployment with risk-neutral agents, endogenous job destruction, and two-sided ex-ante heterogeneity. First, we examine the interaction of labour market institu- tions and skill mismatch. We find that skill mismatch changes the results obtained in a model with ex ante homogeneity. Second, we analyse the interaction of skill mismatch and labour market institutions for the di®erence in the labour market experience of continental...
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