Series: Working Papers. 0813.
Author: Juan J. Dolado, Marcel Jansen and Juan F. Jimeno.
Topics: Labour market | Quantitative methods | Inequality | European Union | Non-financial corporations, businesses.
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Abstract
This paper examines the effects of transitory skill mismatch in a matching model with heterogeneous jobs and workers. In our model, some high-educated workers may accept unskilled jobs for which they are over-qualified but are allowed to engage in on-the-job search in pursuit of a better job. We show that this feature has relevant implications for the set of potential equilibria, the unemployment rates of the different types of workers, the degree of wage inequality, and the response of the labour market to shifts in the demand and supply of skills.