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Bauer, Anja & Enzo Weber (2026): Decomposing Variations in Labor Market Mismatch. (IAB-Discussion Paper 03/2026), Nürnberg, 19 S. DOI:10.48720/IAB.DP.2603

Abstract

"Dieses Diskussionspapier zeigt, wie Veränderungen des Arbeitsmarkt-Mismatch auf die Komponenten Arbeitslosigkeit, offene Stellen und Matchingeffizienz zurückgeführt werden können. Wir stellen fest, dass die Arbeitslosigkeit der wichtigste Faktor ist und auch die zyklischen Schwankungen bestimmt, während die Beiträge der offenen Stellen geringer und antizyklisch sind. Wir unterscheiden nach der Ursache der Arbeitslosigkeit und zeigen, dass Ströme gegenüber der Beschäftigung den Mismatch verstärken, während dies für Nichtbeschäftigung und Ausbildung / Weiterbildung nicht der Fall ist." (Autorenreferat, IAB-Doku)

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Bischof, Stephan & Rolf van der Velden (2026): Wage effects of skill mismatches across domains: the importance of ICT skills. In: Oxford economic papers. DOI:10.1093/oep/gpag001

Abstract

"To date, it is unclear in which skills mismatches are most relevant for individuals’ wages, and whether surpluses or deficits in one domain can offset those in another. This study addresses these gaps by examining how mismatches in five key skill domains (ICT, reading, mathematics, science, and reasoning) are linked to individuals’ wages. Utilizing data from the 2016 wave of the German National Educational Panel Study (NEPS) Adult Cohort, our findings reveal that skill deficits consistently result in lower wages, whereas surpluses do not pay off in each domain. Notably, mismatches in ICT skills are most significant for individuals’ wages: ICT deficits not only reduce wages, but can also negate wage benefits from surpluses in other skills. Conversely, ICT surpluses can compensate for wage penalties associated with deficits in other domains. These findings underscore the importance of digital skills for productivity and wage potential in the modern labour market." (Author's abstract, IAB-Doku) ((en))

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Drasch, Katrin & Gerhard Krug (2026): Finding a job through social networks: monetary and nonmonetary returns for employed and unemployed job seekers. In: European Societies, S. 1-34. DOI:10.1162/euso.a.106

Abstract

"This study examines the impact of job vacancy information obtained through personal contacts on monetary and nonmonetary job search outcomes. We hypothesise that the effects will be positive for both kinds of outcome, and that these effects may depend on employment status prior to finding a new job. Additionally, we hypothesise that information from professional personal contacts will lead to better job search outcomes than information from private personal contacts. We use panel data from the German Panel Study “Labour Market and Social Security” (PASS) and fixed effects regressions to test these hypotheses. Monetary outcomes are measured by wages and nonmonetary outcomes by job satisfaction. Overall, we find that the employed tend to benefit more than the unemployed. However, the specific pattern differs depending on whether vacancy information stems from personal or professional contacts and on the type of outcome (monetary or nonmonetary)." (Author's abstract, IAB-Doku) ((en))

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Galos, Diana Roxana & Joris Frese (2026): Online social class cues and employability: Experimental evidence from Germany. In: Social science research, Jg. 133. DOI:10.1016/j.ssresearch.2025.103258

Abstract

"Social media platforms, such as Twitter or Instagram, offer easily accessible information – relevant or not – for employers when evaluating candidates for a position. In particular, they tend to be sources of information about individuals’ interests and leisure activities.Because interests are highly stratified by social class (e.g., engagement in highbrow and lowbrow activities), this represents a new way for class to potentially manifest itself in the hiring process. To study discrimination in hiring based on online social class cues, we conducted a pre-registered survey experiment in Germany with samples of employers and non-employers, manipulating job applicants’ class cues on social media(highbrow versus lowbrow). Overall, we found no difference in preferences for the candidates displaying highbrow and lowbrow activities on their social media profiles. However, this masks important differences in the specific activities proxying for class. When these activities have no relevance for the jobs in question, higher-class candidates are preferred. Exploratory analyses show that respondents are more likely to express positive sentiments toward the higher-class profiles, with highbrow activities being positively associated with work-related traits. Our findings highlight the need to consider how digital environments and, more specifically, online social class cues, may contribute to class bias in hiring." (Author's abstract, IAB-Doku, © 2025 The Authors. Published by Elsevier Inc.) ((en))

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Hartl, Tobias, Christian Hutter & Enzo Weber (2026): Matching for three: The search activities of workers, firms, and employment services. In: Economic Modelling, Jg. 155, 2025-12-08. DOI:10.1016/j.econmod.2025.107434

Abstract

"The standard labour market matching function neglects a substantial variation of hirings. A crucial driver of this latent part is the search intensity of job seekers and firms, as well as the placement intensity of employment agencies. However, there is still a lack of integration of all three search and placement intensities into a unified theoretical framework. Their combined labour market effects have not been estimated so far. We feed all three intensities into the theoretical framework of a labour market matching function to estimate their impact on the job finding rate – effects which are not settled a priori. This could provide important stylised facts for subsequent theory building. For measuring the search and placement intensities, we use big data on online activity obtained from the job exchange of the German Federal Employment Agency and from its internal placement-software. The results show that all three intensities significantly contribute to the variation in job findings beyond vacancies and unemployment. During the COVID-19 crisis, reduced search intensities accounted for 44 percent of lost hirings and 16 percent of the labour market related increase in unemployment." (Author's abstract, IAB-Doku, © 2025 Elsevier) ((en))

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Jungbauer, Thomas (2026): Strategic Wage Posting, Market Power, and Mismatch. In: Journal of labor economics, Jg. 44, H. 2, S. 481-514. DOI:10.1086/733046

Abstract

"This paper analyzes the effects of firms posting multiple but varying number of vacancies, hence differing in their market power, in professional labor markets. I find that strategic wage Posting does, in general, not result in an efficient assignment of workers to firms. This is because firms with a larger number of vacancies pay on average lower wages than their competitors due to alack of within-firm rivalry. If highly productive firms hire more, the resulting welfare loss dueto mismatch may be substantial. Moreover, I provide a potential explanation why firms postuniform wages, missing out on more-skilled workers." (Author's abstract, IAB-Doku) ((en))

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Baktash, Mehrzad B. (2025): Overeducation, performance pay and wages: evidence from Germany. In: Education Economics, S. 1-21. DOI:10.1080/09645292.2025.2546445

Abstract

"Overeducated workers are more productive and have higher wages in comparison to their adequately educated coworkers in the same jobs. However, they have lower wages than their similarly educated peers who are in correctly matched jobs. This study examines the hypotheses that overeducated workers sort into performance pay jobs as an adjustment mechanism and that performance pay enhances their wages. Using the SOEP, I show that overeducation associates with a higher likelihood of sorting into performance pay jobs and that performance pay significantly improves the wages of overeducated workers. The findings hold in endogenous switching regressions and several robustness checks." (Author's abstract, IAB-Doku) ((en))

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Börschlein, Erik-Benjamin (2025): Essays on Wages and Minimum Wages in Frictional Labor Markets. 237 S. DOI:10.5283/epub.76880

Abstract

"In Deutschland ist das Zusammenspiel zwischen Löhnen und institutionellen sowie marktbedingten Friktionen ein zentrales Thema wirtschaftspolitischer Debatten. Diese Dissertation untersucht in drei empirischen Studien kausale Zusammenhänge zwischen Löhnen und Mindestlöhnen, Matchingfriktionen und Arbeitsmarktanspannung. Die Analysen basieren auf umfangreichen administrativen Daten der Bundesagentur für Arbeit und nutzen fortgeschrittene ökonometrische Methoden zur kausalen Inferenz. Die ersten beiden Kapitel betrachten institutionelle Effekte – insbesondere die Einführung des gesetzlichen Mindestlohns im Jahr 2015 – während das dritte Kapitel den Fokus auf veränderte Marktbedingungen legt, insbesondere den zunehmenden Fachkräftemangel. Ziel ist es, die Wirkungsmechanismen zwischen Löhnen und Arbeitsmarktfriktionen differenziert darzustellen. Kapitel 1 Dieses Kapitel entwickelt einen innovativen Machine-Learning-Ansatz zur verbesserten Schätzung langfristiger Lohneffekte des Mindestlohns. Übliche Studien basieren auf einem fixen Pre-Treatment-Indikator („Bite“), basierend auf Löhnen vor der Politikmaßnahme, der die Betroffenheit von der Mindestlohneinführung nur kurzfristig akkurat abbildet. Um langfristige dynamische Veränderungen zu erfassen, werden hier ein zeitvariable Bite-Indikatoren mittels LASSO-basierter Vorhersagemodelle konstruiert, welche die Inzidenz und die Intensität der Mindestlohnbetroffenheit abbilden. Basierend auf administrativen Daten der Jahre 2010–2014 wird die Mindestlohnbetroffenheit für den Zeitraum 2015–2020 vorhergesagt. In der anschließenden Differenz-von-Differenzen-Analyse zeigen sich signifikant positive Lohneffekte, die im Vergleich zu herkömmlichen Methoden jedoch geringer ausfallen und über die Zeit konstant bleiben. Die Ergebnisse deuten darauf hin, dass traditionelle Evaluierungen die Effekte überschätzen könnten, da sie dynamische Selektionseffekte und mindestlohnunabhängige Lohnentwicklungen nicht ausreichend berücksichtigen. Kapitel 2 In diesem Kapitel wird untersucht, wie sich die Einführung des Mindestlohns auf offene Stellen und damit verbundene Friktionen im Matching-Prozess ausgewirkt hat. Die Analyse basiert auf administrativen Vakanzdaten und Erwerbsbiographien. Die Analyse erfolgt auf der Berufsebenen für den Zeitraum 2013–2019 und nutzt ein Differenz-von-Differenzen-Design. Die Ergebnisse zeigen, dass die Anzahl neu gemeldeter Stellen durch die Mindestlohneinführung insgesamt nicht zurückging. Jedoch stieg der Anteil stornierter Vakanzen um 4–9 Prozent, und die Dauer erfolgreicher Besetzungsprozesse erhöhte sich um 5–6 Prozent. Dies deutet auf verstärkte Such- und Matchingfriktionen hin, etwa durch höhere Einstellungsstandards oder reduzierte berufliche Mobilität. Ergänzende Analysen zeigen geringere Übergänge zwischen Arbeitgebern, insbesondere bei Berufswechseln. Somit wird deutlich, dass die Mindestlohneinführung zwar nur geringe Auswirkungen auf die Beschäftigung hatte, aber dennoch Matchingprozesse erheblich beeinflusst hat. Kapitel 3 Dieses Kapitel wechselt die Perspektive und untersucht, wie zunehmende Arbeitsmarktanspannung – gemessen als Verhältnis von offenen Stellen zu Arbeitssuchenden – die Lohnentwicklung beeinflusst hat. Mithilfe eines Leave-One-Out-Instruments wird der kausale Effekt lokaler Arbeitsmarktanspannung in beruflichen Arbeitsmärkten auf Löhne geschätzt. Die Ergebnisse zeigen moderate, aber signifikant positive Lohneffekte, die etwa 7–19 Prozent des realen Lohnwachstums in Deutschland zwischen 2012 und 2022 erklären. Besonders stark profitieren neu Eingestellte, Hochqualifizierte, Beschäftigte im Dienstleistungssektor und Arbeitnehmer in Ostdeutschland. Zudem steigt der Lohn in Niedriglohnunternehmen überdurchschnittlich stark, was auf eine Verringerung der Lohnungleichheit hindeutet. Im Gesamtfazit werden die Erkenntnisse der drei Studien zusammengeführt. Die Arbeit zeigt, wie institutionelle Eingriffe wie der Mindestlohn einerseits Löhne anheben, gleichzeitig aber neue Friktionen erzeugen können. Andererseits können veränderte Marktbedingungen auch ohne staatliche Eingriffe Löhne steigern – wie etwa bei hoher Arbeitsmarktanspannung. Methodisch hebt die Dissertation die Bedeutung administrativer Mikrodaten und robuster kausaler Analyseverfahren in der Arbeitsmarktforschung hervor." (Autorenreferat, IAB-Doku)

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Carlini, Giacomo (2025): Essays in Macroeconomics and Labor Economics. 147 S.

Abstract

"The first chapter investigates why assortative matching between workers and firms is stronger in large cities than in small cities. I develop a search and matching model with heterogeneous workers and firms to examine how worker composition and labor market frictions affect sorting. Calibrating the model to German employer-employee data, I find that matching efficiency is key to explaining differences in assortative matching across cities. This effect is amplified by a more dispersed worker productivity dispersion. The model shows that around 5% of the GDP gap between large and small cities is attributable to differences in assortative matching, underscoring the role of local labor market frictions and productivity distributions in spatial inequality. The second chapter explores how task-biased technological adoption affects GDP gaps across countries. We introduce a country-specific measure of task intensity and document that as GDP increases, routine work declines while cognitive work rises. Moreover, differences in task content within occupations explain over half of the cross-country differences in routine work. Using a production framework where technology is task-specific and occupations are aggregates of tasks, we estimate task-specific productivities across countries. A counterfactual exercise suggests that reducing dispersion in task-biased technology adoption could shrink the average GDP gap with the United States by 25%. The third chapter examines sectoral labor productivity growth in the U.S. over 50 years, highlighting routine- and skill-biased technical change. I show that routine labor productivity has grown fastest, with skill-biased technical change benefiting skilled workers while unskilled productivity declined, especially in services. Finally, to disentangle the role of different labor-augmenting technological change, I extend the framework to account for heterogeneity in both occupations and skills." (Author's abstract, IAB-Doku) ((en))

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Corradini, Carlo, David Morris & Enrico Vanino (2025): Marshallian agglomeration, labour pooling and skills matching. In: Cambridge Journal of Economics, Jg. 49, H. 3, S. 527-557. DOI:10.1093/cje/beaf010

Abstract

"Better skills matching has long been proposed as one of the key advantages of agglomeration economies. Yet, support for this improved matching has remained largely founded upon indirect proxies for skills such as wages and education. This paper contributes to the literature by offering novel empirical evidence on the relationship between specific measures of localised skills deficiencies and agglomeration economies, in the form of industrial density. Developing an instrumental variable approach and controlling for unobserved heterogeneity and other region-industry idiosyncratic effects across a panel dataset for the period 2009–2019 in England and Wales, our analysis reveals a positive effect of agglomeration economies in reducing both skills gaps within the employed workforce and skills shortages in the labour market external to the firm. We consider these findings in the context of persistent regional imbalances and the importance of strengthening skills provision within current regional industrial strategies." (Author's abstract, IAB-Doku) ((en))

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Garibaldi, Pietro, Pedro Gomes & Thepthida Sopraseuth (2025): Output costs of education and skill mismatch in OECD countries. In: Economics Letters, Jg. 250. DOI:10.1016/j.econlet.2025.112278

Abstract

"We quantify the output costs of education and skills mismatch for 17 OECD economies, using a calibrated model of vertical mismatch. Eliminating the frictions generating mismatch would raise output by 3% to 4% on average, varying between 0.5% to 9% across countries. Although the education and skill mismatch measures are constructed using different methods and differ in size, the output costs are similar between the two measures." (Author's abstract, IAB-Doku, © 2025 The Authors. Published by Elsevier B.V.) ((en))

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Naraidoo, Ruthira & Juan Paez-Farrell (2025): Business cycle models with labour market frictions: the role of the matching function. (Sheffield economic research paper series / The University of Sheffield, Department of Economics 2025006), Sheffield, 25 S.

Abstract

"Standard business cycle models with search and matching frictions in the labour market increasingly rely on the assumption that firms face hiring, as opposed to, search costs in recruiting workers. We show that although this modification im-proves the model's empirical performance, it causes the matching function to play no role in macroeconomic dynamics. Assuming both costs can overcome this short-coming but for reasonable parameter values it implies that matching efficiency shocks have no effects." (Author's abstract, IAB-Doku) ((en))

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Platonov, Konstantin (2025): Post-pandemic recovery: Search and matching, market power, and endogenous labor demand. In: Economic Modelling, Jg. 151. DOI:10.1016/j.econmod.2025.107183

Abstract

"Following the COVID-19 pandemic, United States (US) output rebounded quickly, labor productivity rose above pre-pandemic levels, profit rates increased, and the labor market tightened, all despite high unemployment. These observations can be reconciled in a search and matching model of the labor market with two new assumptions of strong firm market power and endogenous labor demand. Market power encourages firm entry when prices rise, while endogenous labor demand enables firms to adapt to shocks rather than shut down. Two regimes arise: one with weak market power, representing the pre-pandemic era and another with strong market power, explaining the post-pandemic recovery. Under strong market power, firm entry drives recovery following recessions, the labor market becomes tight, wages and producer prices rise, and the average firm size shrinks, which is consistent with the post-pandemic data. This study demonstrates how a typical business cycle can be reconciled with US post-pandemic recovery within a unified model, highlighting the non-trivial role of firms’ market power in shaping macroeconomic outcomes." (Author's abstract, IAB-Doku, © 2025 The Author. Published by Elsevier B.V.) ((en))

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Sharma, Prateek (2025): Job market signalling: game theory and bidding strategies. In: Applied Economics Letters, S. 1-5. DOI:10.1080/13504851.2025.2570861

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Smith, Eric (2025): On-the-job wage dynamics. In: Journal of Economic Theory, Jg. 224. DOI:10.1016/j.jet.2024.105953

Abstract

"This paper assesses wage setting and wage dynamics in a search and matching framework where (i) workers and firms on occasion can meet multilaterally; (ii) workers can recall previous encounters with firms; and (iii) firms cannot commit to future wages and workers cannot commit to not searching in the future. The resulting progression of wages (from firms paying just enough to keep their workers) yields a compensation structure consistent with well established but difficult to reconcile observations on pay dynamics within jobs at firms. Along with wage tenure effects, serial correlation in wage changes and wage growth are negatively correlated with initial wages." (Author's abstract, IAB-Doku, © 2025 The Author. Published by Elsevier Inc.) ((en))

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Tran Nhat, Diana & Timm Teubner (2025): Expectation vs. reality: How stereotypes and expectation disconfirmation affect job evaluations in online labor markets. In: PLoS ONE, Jg. 20, H. 11. DOI:10.1371/journal.pone.0334630

Abstract

"In online labor markets, reputation determines both job opportunities and pay and even small disparities can translate into significant economic differences. While gender-related bias in reputational metrics such as likes, reviews, and ratings has been empirically documented, the mechanisms through which they arise remain insufficiently understood. This study presents results from an online experiment, varying workers’ gender, domain, and performance, to investigate how expectations about workers are formed and how they affect subsequent evaluations. Drawing on Expectation Disconfirmation Theory and Role Congruity Theory, we test whether the effect of disconfirmation (i.e., discrepancies between expected and actual performance) on evaluations varies with congruity (i.e., stereotypical fit between gender and domain). Contrary to our hypothesis, workers in congruent settings do not elicit higher expectations than those in incongruent roles. Similarly, the effect of positive and negative disconfirmation does not vary with congruity. However, exploratory analyses suggest that congruity does affect expectations and evaluations when individuals hold strong gender-domain associations. In case of stereotypical associations, individuals expect higher performance of workers in congruent domains and evaluate them more leniently if they fail to meet expectations. Our findings contribute to understanding why identical performances might be judged differently depending on gender-domain associations, expectations, and disconfirmation." (Author's abstract, IAB-Doku) ((en))

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Abbritti, Mirko & Agostino Consolo (2024): Labour market skills, endogenous productivity and business cycles. In: European Economic Review, Jg. 170. DOI:10.1016/j.euroecorev.2024.104873

Abstract

"This paper analyses how labor market heterogeneity affects unemployment, productivity and business cycle dynamics. To this aim, we set up a model with asymmetric search and matching frictions across skilled and unskilled workers, and endogenous productivity through R&D investment and intangible capital accumulation. Skill mismatch and skill-specific labor market institutions have three main effects on business cycles and growth dynamics. First, the relative scarcity of skilled workers increases the natural rate of unemployment and reduces total factor productivity with long-run effects on the growth rate of output. Second, skill heterogeneity in the labor market generates asymmetric outcomes and amplifies measures of employment, wages and consumption inequality. Finally, the model provides important insights for the Phillips and Beveridge curves. Incorporating skill heterogeneity leads to a flattening of the Phillips curve as wages and unemployment respond unevenly across skill types. Also, the model generates sideward shifts of the Beveridge curve following business cycle shocks, with the extent of these shifts depending on the degree of skill heterogeneity." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Baley, Isaac, Lars Ljungqvist & Thomas J. Sargent (2024): Returns to labour mobility. In: The Economic Journal, Jg. 135, H. 666, S. 430-454. DOI:10.1093/ej/ueae054

Abstract

"Returns to labor mobility have too often escaped the attention they deserve as conduits of important forces in macro-labour models. These returns are shaped by calibrations of productivity processes that use theoretical perspectives and data sources from (i) labour economics and (ii) industrial organization. By investigating earlier prominent studies, we conclude that the focus on firm size dynamics and shocks intermediated through neo-classical production functions in (ii) yields large returns to labor mobility that are robust to parameter perturbations. In contrast, the reliance on statistics in labor economics to calibrate per-worker productivity processes in (i) can give rise to fragilities in the sense that parameter perturbations that generate similar targeted statistics can have very different implications for returns to labor mobility." (Author's abstract, IAB-Doku) ((en))

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Behaghel, Luc, Sofia Dromundo, Marc Gurgand, Yagan Hazard & Thomas Zuber (2024): The Potential of Recommender Systems for Directing Job Search: A Large-Scale Experiment. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16781), Bonn, 65 S.

Abstract

"We analyze the employment effects of directing job seekers' applications toward establishments likely to recruit. We run a two-sided randomization design involving about 800,000 job seekers and 40,000 establishments, based on an empirical model that recommends each job seeker to firms so as to maximize total potential employment. Our intervention induces a 1% increase in job finding rates for short term contracts. This impact comes from a targeting effect combining (i) a modest increase in job seekers' applications to the very firms that were recommended to them, and (ii) a high success rate conditional on applying to these firms. Indeed, the success rate of job seekers' applications varies considerably across firms: the efficiency of applications sent to recommended firms is 2.7 times higher than the efficiency of applications to the average firm. This suggests that there can be substantial gains from better targeting job search, leveraging firm-level heterogeneity." (Author's abstract, IAB-Doku) ((en))

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Belot, Michèle, Xiaoying Liu & Vaios Triantafyllou (2024): Measuring the quality of a match. In: Labour Economics, Jg. 89. DOI:10.1016/j.labeco.2024.102568

Abstract

"The quality of an employment match is a central concept in labor economics. It is relevant for evaluating the welfare impact of labor market policies, and for our understanding of labor market dynamics. This paper reviews the challenges associated with measuring match quality. We first review measures commonly used in the literature, their advantages, and drawbacks. We then present novel evidence from a survey sample of US employees where alternative measures were collected simultaneously. We show that while some of these measures correlate well, others do not. Finally, we present additional partial evidence on the correlations between measures based on the National Longitudinal Survey of Youth (NLSY79), a substantially larger and nationally representative survey. The takeaway message is a word of caution regarding the interpretation of some of these measures and specific concerns regarding using wages and tenure as indicators of match quality." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))