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Mismatch, On-the-job Training, and Unemployment

Author

Listed:
  • Frédéric Gavrel

    (UFR de sciences économiques et de gestion, Université de Caen Basse-Normandie, CREM-CNRS, UMR 6211)

  • Jean-Pascal Guironnet

    (UFR de sciences économiques et de gestion, Université de Caen Basse-Normandie, CREM-CNRS, UMR 6211)

  • Isabelle Lebon

    (UFR de sciences économiques et de gestion, Université de Caen Basse-Normandie, CREM-CNRS, UMR 6211)

Abstract

In this paper, training, which is seen as a way to reduce the mismatch between workers and jobs, takes place on the job. We show that a general rise in unemployment lowers the probability of on-the-job training by reducing the mismatch. We then close the model by assuming free-entry and study its social efficiency properties. Private educational choices are socially optimal, but job creation is too high under the Hosios condition. Using French data on regional unemployment, we estimate a probit model of the training decision and find that on-the-job training is significantly less probable in regions with high unemployment.

Suggested Citation

  • Frédéric Gavrel & Jean-Pascal Guironnet & Isabelle Lebon, 2012. "Mismatch, On-the-job Training, and Unemployment," Economics Working Paper Archive (University of Rennes & University of Caen) 201224, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    • Handle: RePEc:tut:cremwp:201224
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    References listed on IDEAS

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    Cited by:

    1. Christopher Flinn & Ahu Gemici & Steven Laufer, 2017. "Search, Matching, and Training," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 25, pages 260-297, April.
    2. Fernando Rios-Avila & Fabiola Saavedra Caballero, 2019. "It Pays to Study for the Right Job: Exploring the Causes and Consequences of Education-Occupation Job Mismatch," Economics Working Paper Archive wp_922, Levy Economics Institute.

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    More about this item

    Keywords

    On-the-job training; Mismatch; Equilibrium unemployment; Market efficiency;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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