Skill shortages and structural unemployment in Britain: a (mis) matching approach

Abstract

Invokes microeconomic evidence on the nature of British unemployment and its causes, and investigates the thesis that much of its increase during the late 1970s and early 1980s can be attributed to the mismatch of different types of skills resulting from technical change. The paper presents preliminary evidence on skills mismatch, and a theoretical model incorporating skill differentiation in which biased labour-augmenting technical change could alter the equilibrium unemployment rate. The author also considers econometric evidence on the bias in technical change, relative labour demand, and wages, followed by a summary of the chapter's main points and some policy considerations. There is a discussion of the article by U. Trivellato, pp 354-359. -P.Hardiman