?:abstract
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"This paper discusses the performance of popular mismatch indexes proposed by Lilien (1982), Jackman and Roper (1987), Jackman, Layard and Savouri (1991), and Lambert (1988). Results in the literature show that, with the exception of Lambert's index, the measures of mismatch reveal decreasing or at least stable mismatch for European labour markets. This contradicts micro evidence which suggests declining mobility. Sometime series analysis tackles this puzzle, and shows that indices consisting of aggregate time series may lead to false conclusions. Measures of mismatch fail when time series shift upward: Without changing the relative structure between individual groups (regions, skills, occupation), this paper shows that trending time series imply a decreasing mismatch for all but one index. The only exception is Lambert's rho. Here stochastic trends lead to a spurious increase of mismatch."
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