We study an economy where the labour market is plagued with search imperfections and is segmented along a set of professions. To enter a profession, workers need to undertake a specific educational investment. At the time of the investment, however, workers are imperfectly informed on the outlook offered by any profession as they only observe a private and a public signal concerning this outlook. We show that imperfect information induces misallocation of labour across professions and increases the rate of unemployment. We also show that, contrary to the policy advice of some labour market observers, an increase in the precision of the public signal does not necessarily lead to a reduction in the rate of unemployment.

Femminis, G., Piccirilli, G., EDUCATION, MISMATCH AND UNEMPLOYMENT, <<RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI>>, 2019; 2019 (3): 285-312. [doi:10.26350/000518_0034] [http://hdl.handle.net/10807/147593]

EDUCATION, MISMATCH AND UNEMPLOYMENT

Femminis, Gianluca
Primo
;
Piccirilli, Giulio
Secondo
2019

Abstract

We study an economy where the labour market is plagued with search imperfections and is segmented along a set of professions. To enter a profession, workers need to undertake a specific educational investment. At the time of the investment, however, workers are imperfectly informed on the outlook offered by any profession as they only observe a private and a public signal concerning this outlook. We show that imperfect information induces misallocation of labour across professions and increases the rate of unemployment. We also show that, contrary to the policy advice of some labour market observers, an increase in the precision of the public signal does not necessarily lead to a reduction in the rate of unemployment.
2019
Inglese
Femminis, G., Piccirilli, G., EDUCATION, MISMATCH AND UNEMPLOYMENT, <<RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI>>, 2019; 2019 (3): 285-312. [doi:10.26350/000518_0034] [http://hdl.handle.net/10807/147593]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/147593
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