EDUCATION, MISMATCH AND UNEMPLOYMENT

Gianluca Femminis, Giulio Piccirilli

Research output: Contribution to journalArticlepeer-review

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.
Original languageEnglish
Pages (from-to)285-312
Number of pages28
JournalRivista Internazionale di Scienze Sociali
Volume2019
DOIs
Publication statusPublished - 2019

Keywords

  • Information Processing
  • Occupational Choice
  • Returns to Education

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