Mismatch unemployment in the Finnish labour market

dc.contributorAalto-yliopistofi
dc.contributorAalto Universityen
dc.contributor.authorHakola, Timopekka
dc.contributor.departmentTaloustieteen laitosfi
dc.contributor.departmentDepartment of Economicsen
dc.contributor.schoolKauppakorkeakoulufi
dc.contributor.schoolSchool of Businessen
dc.date.accessioned2016-02-25T11:08:18Z
dc.date.available2016-02-25T11:08:18Z
dc.date.dateaccepted2016-01-14
dc.date.issued2016
dc.description.abstractIn this paper, I study mismatch between job-seekers and vacancies across sectors in the Finnish labour market between 2006 and the beginning of 2015. The amount of lost hires caused by the imbalance between job-seekers and vacancies is measured by a mismatch index, which allows us to construct an efficient allocation of job-seekers across sectors. Further, this efficient allocation is used to define a counterfactual un-employment rate to measure the magnitude of mismatch. Studying the causes of unemployment is increasingly important especially in Finland, where the share of long-term unemployed job-seekers has shown a steady increase af-ter the financial crisis. This paper presents mismatch theory as one possible explana-tion for the prolonged unemployment in the Finnish labour market. This study utilizes the labour market data from Local Labour Offices made available by the Ministry of Employment and the Economy. The rich panel data set consists of monthly information on job seekers, vacancies and hires between 2006 and April 2015. The data is compiled both in geographical and occupational dimensions to allow the estimation of a mismatch index across both sectors. Mismatch measurements indicate possible gains to be made in hires by allocating job-seekers efficiently. Spatially lost hires vary monthly between 5 and 7 percent when sec-tor-specific efficiencies are considered. Occupational mismatch indices show wider variation ranging monthly from 2 to 14 percent depending on the level of disaggrega-tion. Mismatch peaked especially sharply across occupations as the financial crisis burst in 2008. According to the approximation of counterfactual unemployment rates, mismatch explains around one fifth of the aggregate unemployment rate. Most nota-bly, the results indicate that mismatch is currently increasing on all dimensions. In line with previous studies from the US and Sweden, mismatch is more severe across occu-pations than regions.en
dc.ethesisid14277
dc.format.extent56
dc.format.mimetypeapplication/pdfen
dc.identifier.urihttps://aaltodoc.aalto.fi/handle/123456789/19795
dc.identifier.urnURN:NBN:fi:aalto-201602261433
dc.language.isoenen
dc.locationP1 I
dc.programme.majorEconomicsen
dc.programme.majorKansantaloustiedefi
dc.subject.helecontaloustieteet
dc.subject.heleconeconomic science
dc.subject.helecontyömarkkinat
dc.subject.heleconlabour market
dc.subject.helecontyö
dc.subject.heleconwork
dc.subject.helecontyövoima
dc.subject.heleconlabour supply
dc.subject.helecontyönhaku
dc.subject.heleconjob applications
dc.subject.keywordmatching model
dc.subject.keywordmismatch
dc.subject.keywordunemployment
dc.subject.keywordlabour market
dc.subject.keywordmismatch index
dc.subject.keywordlabour economics
dc.subject.keywordtyöttömyys
dc.subject.keywordtyömarkkinat
dc.subject.keywordtyövoiman kohtaanto
dc.titleMismatch unemployment in the Finnish labour marketen
dc.typeG2 Pro gradu, diplomityöfi
dc.type.dcmitypetexten
dc.type.ontasotMaster's thesisen
dc.type.ontasotPro gradu tutkielmafi
local.aalto.idthes14277
local.aalto.openaccessyes
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