Mismatch and unemployment in local labour markets

Citation

Adams J, Greig M & McQuaid R (1999) Mismatch and unemployment in local labour markets. Regional Science Association International 29th European Congress, Dublin, 24.08.1999-27.08.1999. https://www.academia.edu/20689798/Mismatch_and_unemployment_in_local_labour_markets?

Abstract
This paper examines employer-jobseeker mismatch and the extent to which the time needed to fill vacancies is affected by characteristics and practices of employers in two different travel to work areas. Unemployment due to mismatch has been explained in economic literature as a function of factors such as changes in market structure, information asymmetry caused by inefficient job matching processes such as employment agencies, and lack of workforce flexibility in terms of geographic mobility, wages and skills. Policy measures aimed at reducing mismatch have largely concentrated upon increasing worker flexibility by way of skills training and benefit sanctions together with schemes to increase job search efficiency on the part of the worker. National policies may be effective at reducing the level of unemployment nationally, but they do not take into account the diverse nature of local labour markets. To reduce unemployment in regions with an inherently low demand for labour it may not be sufficient to implement the supply side measures as described above. It has been argued that skill shortages are only a subset of more general recruitment difficulties amongst firms, although many studies equate the two. This paper suggests that supply side factors in general are a subset of recruitment difficulties, particularly in regions with a low demand for labour. It was hypothesised that for both TTWAs there are particular demand side determinants of mismatch unemployment, reflecting the nature and attitude of employers, that would be associated with vacancy duration. The paper reports findings from a series of 126 in-depth interviews carried out with employers in the Edinburgh and Bathgate TTWAs. The interviews generated information of a quantitative and qualitative nature on the characteristics, attitudes and recruitment practices of employers, together with the time taken to fill the last vacancy. Using results from a multiple regression of vacancy duration against the independent variables, evidence is found that firm characteristics, employer reputation, recruitment standards, gender preference, type of contract and methods of recruitment all have a significant effect on vacancy duration. Evidence was found of significant differences between the areas in the factors associated with vacancy duration.

Keywords
Local labour market; mismatch; Skill shortage; Job contracts; Vacancy duration; Training policies