Mismatch Unemployment in Austria: The Role of Regional Labour Markets for Skills

René Böheim ,Michael Christl

doi:10.2139/ssrn.3851034

Abstract

During the last decade, the Austrian labour market experienced a substantial outward shift of the Beveridge curve. Using detailed administrative data on vacancies and registered unemployed by region and skill level, we test which factors caused this shift. We find that the Beveridge curve shifted primarily because mismatch increased substantially. Looking on the regional and skill dimension of mismatch unemployment, we find a substantial increase of mismatch unemployment for manual routine tasks as well as for the region of Vienna.

Highlights

The Austrian unemployment rate increased from about 4 percent at the beginning of 2000 to 5.6 percent in 2005 and, after the Great Recession, it increased to about 6 percent by 2015
Our results show that the outward shift of the Austrian Beveridge curve was primarily caused by a substantial increase of mismatch unemployment for manual routine tasks
We see that the mismatch increased in particular for manual routine tasks and to some extent for cognitive routine tasks and analytical non-routine tasks after 2014. These differences correspond to shifts of the estimated Beveridge curves, where the shift is especially pronounced for manual routine tasks

Summary

Introduction

The Austrian unemployment rate increased from about 4 percent at the beginning of 2000 to 5.6 percent in 2005 and, after the Great Recession, it increased to about 6 percent by 2015. Schiman (2018) argues in a macro-model framework that the Austrian Beveridge curve shifted due to a labour supply shock caused by the opening of the labour market to several Eastern European countries after 2008. Following Veracierto (2011) and Şahin, Song, Topa and Violante (2014), we test whether or not the outward shift of the Beveridge curve in Austria was caused by mismatch unemployment. We use unemployment data from the Austrian unemployment office (AMS) by skill level and labour market district level. We combine these data with information from the Austrian Mikrozensus, which includes detailed information on employment by skill levels and by regions. We subsequently provide analyses at different levels of disaggregation, by regions and skill levels, to provide more detailed evidence for the shift of the Beveridge curve

Results

Discussion

Conclusion