Tuesday, June 24, 2008

Plenty of work?

One curious inconsistency noted by yesterday’s comment, is the fact that there are many jobs that go unfilled. How can the unemployment rate increase while jobs are available? One answer to this question is that it takes some time to someone to respond to an advertisement and be hired. Another, even more important factor, is that there is a mismatch between the characteristics of the unemployed and the characteristics of the jobs available. The unemployment rate is much, much higher for teens and for those with lower levels of education (see graph below). Another form of mismatch is between the location of the employer and the location of the employee. This is especially important now that gas prices are so high and commuting costs are higher. If the salary doesn’t cover the costs of being employed, an potential worker can not afford to take the job.

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