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.
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