Paper by Ana Figueiredo published in the Journal of Political Economy

13:27 Publication - The paper 'Mismatch Cycles' by Assistant Professor Ana Figueiredo and co-authors Isaac Baley and Robert Ulbricht, has been published in the November issue of the Journal of Political Economy, one of the oldest and most prestigious journals in economics. A novel narrative for the scarring effect of unemployment. In their paper, Ana Figueiredo (Erasmus School of Economics) and co-authors Isaac Baley (Universitat Pompeu Fabra) and Robert Ulbricht (Boston College) study the cyclical dynamics of skill mismatch and quantify its impact on labour productivity. They build a tractable directed search model, in which workers differ in skills along multiple dimensions and sort into jobs with heterogeneous skill requirements. Skill mismatch arises because of information frictions and is prolonged by search frictions. Estimated to the United States, the model replicates salient business cycle properties of mismatch. In particular, the authors find that in recessions skill mismatch decreases among ongoing working relationships but goes up among new hires.