Category: 2020

Can the Mafia’s Tentacles Be Severed? The Economic Effects of Removing Corrupt City Councils

2020, Alessandra Fenizia, Working Papers

December 2020

Alessandra Fenizia and Raffaele Saggio

IIEP working paper 2020-22

Abstract: This paper evaluates the long-run economic impact of the fight against organized crime. It uses rich administrative data from Italy and studies one of the most aggressive policies aimed at combating criminal organizations: the city council dismissal. Under this policy, local administrations believed to be infiltrated by the Mafia are dismissed by the central government and the municipality is then administrated by a team of public servants appointed by the central government for approximately two years. Using a matched difference-in-differences design, we find that this policy fosters economic growth. Specifically, the city council dismissal increases formal employment by 16.9% nine years after the dismissal and this effect appears to be partially driven by the entry of new workers in the formal sector. Treated municipalities also display higher economic dynamism and a surge in industrial real estate prices in the aftermath of the intervention. These effects appear to be mediated by an increase in the quality of local politicians elected after the city council dismissal. We show that these newly elected politicians raise local tax compliance and were able to increase expenditures on roads and infrastructures. Overall, our results imply that there are significant long-run economic benefits associated with targeted law enforcement actions against criminal organizations.

JEL Codes: D73, G38, K42

Key Words: corruption, mafia, organized crime

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Candidate Filtering: The Strategic Use of Electoral Fraud in Russia

2020, Authors, David Szakonyi, Working Papers

November 2020

David Szakonyi (George Washington University)

IIEP working paper 2020-23

Abstract: Incumbents have many tools to tip elections in their favor, yet we know little about how they choose between strategies. By comparing various tactics, this paper argues that electoral malpractice centered on manipulating institutions offers the greatest effectiveness while shielding incumbents from public anger and criminal prosecution. To demonstrate this, I focus on one widespread institutional tactic: preventing candidates from accessing the ballot. First, in survey experiments, Russian voters respond less negatively to institutional manipulations, such as rejecting candidates, than to blatant fraud, such as ballot-box stuffing. Next, using evidence from 25,935 Russian mayoral races, I show that lower societal and implementation costs enable incumbents to strategically reject candidacies from credible challengers and then reduce their electoral vulnerability. In all, the technology behind specific manipulations helps determine when and how incumbents violate electoral integrity.

JEL Codes: D7, H40

Key Words: electoral fraud, authoritarianism, Russia, public opinion

Electoral Manipulation and Regime Support: Survey Evidence from Russia

2020, David Szakonyi, Working Papers

November 2020

David Szakonyi (George Washington University), Ora John Reuter (University of Wisconsin-Milwaukee)

IIEP working paper 2020-19

Abstract: Does electoral fraud stabilize authoritarian rule or undermine it? The answer to this question rests, in part, on how voters evaluate regime candidates who engage in fraud. Using a survey experiment conducted after the 2016 elections in Russia, we find that voters withdraw their support from ruling party candidates who commit electoral fraud. This effect is especially large among strong supporters of the regime. Core regime supporters are more likely to have ex ante beliefs that elections are free and fair. Revealing that fraud has occurred significantly reduces their propensity to support the regime. These findings illustrate that fraud is costly for autocrats not just because it may ignite protest, but also because it can undermine the regime’s core base of electoral support. Because many of its strongest supporters expect free and fair elections, the regime has strong incentives to conceal or otherwise limit its use of electoral fraud. 

JEL Codes: D7, H40

Key Words: electoral fraud; authoritarianism, Russia

Indecent Disclosures: Anti-Corruption Reforms and Political Selection

2020, Authors, David Szakonyi, Working Papers

November 2020

David Szakonyi (George Washington University)

IIEP working paper 2020-21

Abstract: Cracking down on corruption has become a key tool for politicians to build popular support. But little is known about whether anti-corruption measures actually change political behavior. This paper evaluates the effects of a common reform — financial disclosures — using data on 25,724 elections in Putin-era Russia. I argue that financial disclosures function like a personal audit, generating information for journalists and prosecutors to investigate illicit gains earned inside and outside of government. Exploiting staggered elections, I find that the passage of a disclosures requirement led to roughly 25% fewer incumbents seeking re-election and 10% fewer candidates with suspicious financial histories. Greater media freedom and law enforcement capacity further increase the risk of corruption and tax evasion being exposed, resulting in even fewer candidacies from those criminally exposed. Increasing transparency changes the incentives for serving in elected office, even in settings where other political motives may be at play.

JEL Codes: D7, H40, D73

Key Words: corruption, anti-corruption, Russia, reforms, elections

Test Format and Calculator Use in the Testing of Basic Math Skills for Principles of Economics: Experimental Evidence

2020, Development Economics, Irene R. Foster, Working Papers

August 2020

Irene R. Foster (George Washington University),  Melanie Allwine Fennell (Randolph-Macon College)

IIEP working paper 2020-20

Abstract: Results from an experiment in Fall 2013 of 902 incoming students at this university are reported. In this experiment, after students were given a basic math assessment to ensure they had the necessary math skills to take a principles of economics course, they were randomly allocated to a treatment or control group to test if there was a significant impact of test format, calculator use, and calculator type on students’ scores. The interaction of calculator use/type and test format was also tested. The results from this experiment suggest that each treatment had a significant positive impact on students’ assessment scores, with much variation depending on the type of question asked and the level of performance.

JEL Codes: A22, C23

Key Words: Economic Education, Teaching Economics, Math Assessment, Microeconomics,
Calculator Use, Test Format

The IMF’s Financial Catch 22: Global Banker or Lender of Last Resort?

2020, Stephen B. Kaplan, Working Papers

August 2020

Stephen B. Kaplan (George Washington University), Sujeong Shim (University of Wisconsin-Madison)

IIEP working paper 2020-18

Abstract: The International Monetary Fund (IMF) has dual institutional roles: a steward of international financial stability and a global banker safeguarding the resources of its sovereign shareholders. But, how does the IMF behave when its balance sheet becomes exposed to higher-than-usual credit risk, creating a financial catch-22? We expect the IMF varies its lending behavior, based on the nature of sovereign credit crises. When there is high contagion risk, the IMF aims to preserve global financial stability as a lender of last resort by extending large loans, notwithstanding its balance sheet strains. The IMF employs policy conditionality to hedge its lending risk, but prioritizes alleviating global market turmoil over program compliance. When market contagion is contained, however, the IMF is more likely to act as a traditional banker, suspending programs for non- compliance. Ironically, given its tendency to forgive non-compliance as a lender of last resort, our theoretical framework suggests that the Fund intensifies its moral hazard problem.

We test our theoretical priors by conducting a comparative case study analysis of IMF decision-making over time for two of its largest borrowers: Argentina and Greece. Leveraging volumes of hundred-paged minutes from IMF executive board
meeting archives and extensive field research interviews, we illustrate the lending stances of IMF directors evolve in response to changes in global contagion risk. By examining the IMF’s own institutional agency under high financial risk, this study offers new insights for the study of international political economy and international organizations.

JEL Codes: 

Key Words: IMF; lender of last resort; financial crises, institutional financial risk; contagion risk; Argentina; Greece

Epidemics, inequality and poverty in preindustrial and early industrial times

2020, Remi Jedwab, Working Papers

August 2020

Guido Alfani (Bocconi University, Dondena Centre, IGIER, and Stone Center for Research on Socio-Economic Inequaltiy)

IIEP working paper 2020-16

Abstract: *This paper is part of a Symposium organized by Dr. Remi Jedwab of the George Washington University that will appear in the Journal of Economic Literature.* Recent research has explored the distributive consequences of major historical epidemics, and the current crisis triggered by Covid-19 prompts us to look at the past for insights about how pandemics can affect inequalities in income, wealth, and health. The fourteenth-century Black Death, which is usually believed to have led to a significant reduction in economic inequality, has attracted the greatest attention. However, the picture becomes much more complex if other epidemics are considered. This article covers the worst epidemics of preindustrial times, from Justinian’s Plague of 540-41 to the last great European plagues of the seventeenth century, as well as the cholera waves of the nineteenth. It shows how the distributive outcomes of lethal epidemics do not only depend upon mortality rates, but are mediated by a range of factors, chief among them the institutional framework in place at the onset of each crisis. It then explores how past epidemics affected poverty, arguing that highly lethal epidemics could reduce its prevalence through two deeply different mechanisms: redistribution towards the poor, or extermination of the poor. It concludes by recalling the historical connection between the progressive weakening and spacing in time of lethal epidemics and improvements in life expectancy, and by discussing how epidemics affected inequality in health and living standards.

 

JEL Codes: D31, D63, I14, I30, J11, N30, N33

Key Words: epidemics; inequality; poverty

The 1918 Influenza Pandemic and its Lessons for COVID-19

2020, Remi Jedwab, Working Papers

August 2020

Brian Beach (Vanderbilt University and NBER), Karen Clay (Carnegie Mellon University and NBER), Martin Saavedra (Oberlin College)

IIEP working paper 2020-15

Abstract: *This paper is part of a Symposium organized by Dr. Remi Jedwab of the George Washington University that will appear in the Journal of Economic Literature.* This article reviews the global health and economic consequences of the 1918 infuenza pandemic, with a particular focus on topics that have seen a renewed interest because of COVID-19. We begin by providing an overview of key contextual and epidemiological details as well as the data that are available to researchers. We then examine the effects on mortality, fertility, and the economy in the short and medium run. The role of nonpharmaceutical interventions in shaping those outcomes is discussed throughout. We then examine longer-lasting health consequences and their impact on human capital accumulation and socioeconomic status. Throughout the paper we highlight important areas for future work.

 

JEL Codes: I10, N0, J10, J24

Key Words: Pandemics; 1918 Influenza; COVID-19; epidemics

The Economic Impact of the Black Death

2020, Remi Jedwab, Working Papers

June 2020

Remi Jedwab (George Washington University), Noel D. Johnson (George Mason University), Mark Koyama (George Mason University)

IIEP working paper 2020-14

Abstract: *This paper is part of a Symposium organized by Dr. Remi Jedwab of the George Washington University that will appear in the Journal of Economic Literature.* The Black Death was the largest demographic shock in European history. We review the evidence for the origins, spread, and mortality of the disease. We document that it was a plausibly exogenous shock to the European economy and trace out its aggregate and local impacts in both the short-run and the long-run. The initial effect of the plague was highly disruptive. Wages and per capita income rose. But, in the long-run, this rise was only sustained in some parts of Europe. The other indirect long-run effects of the Black Death are associated with the growth of Europe relative to the rest of the world, especially Asia and the Middle East (the Great Divergence), a shift in the economic geography of Europe towards the Northwest (the Little Divergence), the demise of serfdom in Western Europe, a decline in the authority of religious institutions, and the emergence of stronger states. Finally, avenues for future research are laid out.

 

JEL Codes: N00, N13, I15, I14, J11, O10, O43

Key Words: Pandemics; Black Death; Institutions; Cities; Urbanization; Malthusian Theory; Demography; Long-Run Growth; Middle Ages; Europe; Asia;

Pandemics, Poverty, and Social Cohesion: Lessons from the Past and Possible Solutions for COVID-19

2020, Remi Jedwab, Working Papers

June 2020

Remi Jedwab (George Washington University), Amjad M. Khan (The World Bank),Richard Damania (The World Bank), Jason Russ (The World Bank), Esha D. Zaveri (The World Bank)

IIEP working paper 2020-13

Abstract: Since COVID-19 broke out, there has been renewed interest in understanding the economic and social dynamics of historical and more recent pandemics and epidemics, from the plagues of Antiquity to modern-day outbreaks like Ebola. These events can have significant impacts on the interplay between poverty and social cohesion, i.e. how different groups in society interact and cooperate to survive and prosper. To that effect, this survey paper provides an overview of how social responses to past pandemics and epidemics were determined by the epidemiological and non-epidemiological characteristics of these outbreaks, with a particular focus on the scapegoating and persecution of minority groups, including migrants. More precisely, we discuss existing theories as well as historical and quantitative studies, and highlight the cases and contexts where pandemics may lead to milder or more severe forms of scapegoating. Finally, we conclude with a summary of priorities for future research on pandemics and social cohesion and discuss the possible effects and policy implications of COVID-19.

 

JEL Codes: O15, O18, I15, I19, J61, J71

Key Words: COVID-19; Pandemics; Epidemics; Disasters; Social Cohesion; Stigmatization; Minority Persecution; Conflict; Poverty; Migration; Social Capital; Trust

A tale of two wage subsidies: The American and Australian fiscal responses to COVID-19

2020, Steven Hamilton, Working Papers

July 2020

Steven Hamilton (George Washington University)

IIEP working paper 2020-12

Abstract: Australia suppressed the virus with swift and strong public health measures including stringent border controls. As of July 2020, the virus continues to spread uncontrolled across the US, resulting in the most recorded cases and deaths of any country. Both countries instituted widespread lock-downs and similarly generous fiscal support, yet Australia has experienced a far milder recession, highlighting the critical role of public health measures in protecting the economy. The role of broad cash stimulus necessarily has been more limited than in an ordinary recession, justifying the use of wage subsidies that encourage businesses to retain workers. The Australian wage subsidy, delivered via the tax authority, was better targeted, more generous, more accessible, but slower to deliver liquidity than the American wage subsidy delivered via private banks. The experience highlights the critical need for significant investments in IRS infrastructure to better prepare for future crises.

 

JEL Codes:

Key Words: 

Women at Work in the Pre-Civil War United States: An Analysis of Unreported Family Workers

2020, Barry Chiswick, Working Papers

June 2020

Barry R. Chiswick (George Washington University) and RaeAnn Halenda Robinson (George Washington University)

IIEP working paper 2020-11

Abstract: Rates of labor force participation in the US in the second half of the nineteenth century among free women were exceedingly (and implausibly) low, about 11 percent. This is due, in part, to social perceptions of working women, cultural and societal expectations of female’s role, and lack of accurate or thorough enumeration by Census officials. This paper develops an augmented free female labor force participation rate for 1860. It is calculated by identifying free women (age 16 and older) who were likely providing informal and unenumerated labor for market production in support of a family business, that is, unreported family workers. These individuals are identified as not having a reported occupation, but are likely to be working on the basis of the self-employment occupation of other relatives in their households. Family workers are classified into three categories: farm, merchant, and craft. The inclusion of this category of workers more than triples the free female labor force participation rate in the 1860 Census, from 16 percent to 56 percent, which is comparable to today’s rate (57 percent in 2018).

 

JEL Codes: N31, J16, J21, J82

Key Words: Women, Labor Force Participation, Occupational Attainment, Unpaid Workers, Unreported Family Workers, 1860 Census

Long-Run Effects of Incentivizing Work After Childbirth

2020, Development Economics, Elira Kuka, International Trade, Ultra Poverty, Working Papers

May 2020

Elira Kuka (George Washington University, IZA, and NBER) and Na’ama Shenhav (Dartmouth College and NBER)

IIEP working paper 2020-10

Abstract: This paper uses a panel of SSA earnings linked to the CPS to estimate the impact of increasing post-childbirth work incentives on mothers’ long-run career trajectories. We implement a novel research design that exploits variation in the timing of the 1993 reform of the Earned Income Tax Credit (EITC) around a woman’s first birth and in eligibility for the credit. We find that single mothers exposed to the expansion immediately after a first birth (“early-exposed”) have 3 to 4 p.p. higher employment in the 5 years after a first birth than single mothers exposed 3 to 6 years after a first birth (“late-exposed”). Ten to nineteen years after a first birth, early-exposed mothers have the same employment and hours as late-exposed mothers, but have accrued 0.5 to 0.6 more years of work experience and have 6 percent higher earnings. Incorporating long-run effects on EITC benefits and earnings increases the implied marginal value of public funds (MVPF) of the expansion. Our results suggest that there are steep returns to work incentives at childbirth that accumulate over the life-cycle.

 

JEL Codes: J16, J31, H2

Key Words: child penalty, EITC

Medieval Cities Through the Lens of Urban Economic Theories

2020, Development Economics, International Trade, Remi Jedwab, Working Papers

May 2020

Remi Jedwab (George Washington University), Noel D. Johnson (George Mason University), and Mark Koyama (George Mason University)

IIEP working paper 2020-9

Abstract: We draw on theories and empirical findings from urban economics to explore and explain patterns of city growth in the Middle Ages (c. 800-1500 CE). We discuss how agricultural development and physical geography determined the location and size of cities during the medieval period. We also consider the relative importance of economies of scale, agglomeration, and human capital spillovers in medieval cities and discuss how their growth was limited by disamenities and constraints on mobility. We discuss how medieval cities responded to shocks such as the Black Death and describe how institutions became increasingly important in determining their trajectories. Avenues for future research are also laid out.

 

JEL Codes: R11; R12; R19; N9; N93; N95

Key Words: Medieval Era; City Growth; Urbanization; Food Surplus Hypothesis; Agglomeration Effects; Labor Mobility; Pandemics; Institutions; Europe; Asia

A Plurilateral “Single Data Area” Is the Solution to Canada’s Data Trilemma

2020, Global Governance, Susan Aaronson, Working Papers

September 2019

Susan A. Aaronson and Patrick Leblond

IIEP working paper 2020-8

Summary: With its relatively small population, Canada faces a challenge in terms of the amount of high-quality data that it can generate to support a successful data-driven economy. As a result, Canada needs to allow data to flow freely across its borders. However, it also has to provide a high-trust data environment if it wants individuals, firms and government to participate actively in such an economy. As such, Canada (and other countries) faces what can be called the data trilemma, whereby it is not possible to have simultaneously data that flows freely across borders, a high-trust data environment and a national data protection regime; one of these three objectives has to give so that only two are effectively possible at the same time.

To resolve the data trilemma, Canada should work with its key economic partners — namely the European Union, Japan and the United States — to develop a single data area that would be managed by an international data standards board. The envisioned single data area would allow for all types of personal and non-personal data to flow freely across borders while ensuring that individuals, consumers, workers, firms and governments are protected from potential harm arising from activities such as the collection, processing, use, storage or purchase/sale of data. If Canada and its economic partners share similar norms and standards for regulating data, then allowing data to flow freely across borders with these countries no longer risks undermining trust, which is crucial to a successful data-driven economy.

America’s uneven approach to AI and its consequences

2020, Global Governance, Susan Aaronson

April 2020

Susan A. Aaronson

IIEP working paper 2020-7

Introduction Excerpt: The world’s oceans are in trouble. Global warming is causing sea levels to rise and reducing the supply of food in the oceans. The ecological balance of the ocean has been disturbed by invasive species and cholera. Many pesticides and nutrients used in agriculture end up in the coastal waters, resulting in oxygen depletion that kills marine plants and shellfish. Meanwhile the supply of fish is declining due to overfishing. Yet to flourish, humankind requires healthy oceans; the oceans generate half of the oxygen we breathe, and, at any given moment, they contain more than 97% of the world’s water. Oceans provide at least a sixth of the animal protein people eat. Living oceans absorb carbon dioxide from the atmosphere and reduce climate change impacts. Many civil society groups (NGOs) are trying to protect this shared resource. As example, OceanMind uses satellite data and artificial intelligence (AI) to analyze the movements of vessels and compare their activities to historical patterns. The NGO can thus identify damaging behavior such as overfishing

Data Governance, AI, and Trade: Asia as a Case Study

2020, Global Governance, Susan Aaronson, Working Papers

April 2020

IIEP working paper 2020-6

Introduction Excerpt: The arc of history seems to be bending again towards the dynamic nations of Asia (Gordon: 2008). The countries and territories of the Asia Pacific region are both a locus for trade and a source of technology fueled growth. In 2017, Asia recorded the highest growth in merchandise trade volume in 2017 for both exports and imports (WTO: 2018, 32). UNCTAD reports that exports of digitally deliverable services increased substantially across all regions during the period 2005– 2018, with a compound annual growth rate ranging between 6 and 12 per cent (table III.1). Growth was the highest in developing countries, especially in Asia (UNCTAD: 2019, 66).

Artificial intelligence (AI) is already a leading source of growth for many Asian countries. The AI market in the Asia Pacific was estimated at around US $450 million in 2017 and is expected to grow at a compounded annual growth rate of 46.9% by 2022 (Ghasemi: 2018). Several analysts believe Asia’s AI growth will soon overtake the US (Lee: 2018; Ghasemi: 2018)

Data Is Dangerous: Comparing the Risks That the United States, Canada and Germany See in Data Troves

2020, Global Governance, Susan Aaronson, Working Papers

April 2020

Susan A. Aaronson

IIEP working paper 2020-5

Summary: Citizens of the United States, Canada and Germany know that the online world is simultaneously a wondrous and dangerous place. They have seen details about their activities, education, financial status and beliefs stolen, misused and manipulated. This paper attempts to examine why stores of personal data (data troves) held by private firms became a national security problem in the United States and compares the US response to that of Canada and Germany. Citizens in all three countries rely on many of the same data-driven services and give personal information to many of the same companies. German and Canadian policy makers and scholars have also warned of potential national security spillovers of large data troves. However, the three nations have defined and addressed the problem differently. US policy makers see a problem in the ownership and use of personal data (what and how) instead of in America’s own failure to adequately govern personal data. The United States has not adopted a strong national law for protecting personal data, although national security officials have repeatedly warned of the importance of doing so. Instead, the United States has banned certain apps and adopted investment reviews of foreign firms that want to acquire firms with large troves of personal data. Meanwhile, Canada and Germany see a different national security risk. They find the problem is where and how data is stored and processed. Canadian and German officials are determined to ensure that Canadian and German laws apply to Canadian and German personal and/or government data when it is stored on the cloud (often on US cloud service providers). The case studies illuminate a governance gap: personal data troves held by governments and firms can present a multitude of security risks. However, policy makers have put forward nationalistic solutions that do not reflect the global nature of the risk.

The Value of Reputation in Trade: Evidence from Alibaba

2020, Global Governance, Maggie Chen, Working Papers

March 2020

Maggie X. Chen and Min Wu

IIEP working paper 2020-4

Abstract: We examine the role of an online reputation mechanism in international trade by exploring T-shirt exports on Alibaba. Exploiting rich transaction data and features of search and rating algorithms, we show that exporters displaying a superior reputation perform significantly better than peers with nearly identical true ratings and observables and the value of reputation rises with the level of information friction and the specificity of information. We develop a dynamic reputation model with heterogeneous cross-country information friction to quantify the effect of the reputation mechanism and find a 20-percent increase in aggregate exports fueled by a market reallocation towards superstars.

JEL Codes: F1, D8

Key Words: reputation, information, superstar, and Alibaba

Human Capital Accumulation at Work: Estimates for the World and Implications for Development

2020, Development Economics, Remi Jedwab, Working Papers

February 2020

Remi Jedwab, Asif Islam, Paul Romer, and Robert Samaniego

IIEP working paper 2020-3

Abstract: In this paper, we: (i) study wage-experience profiles and obtain measures of returns to potential work experience using data from about 24 million individuals in 1,084 household surveys and census samples across 145 countries; (ii) show that returns to work experience are strongly correlated with economic development – workers in developed countries appear to accumulate twice more human capital at work than workers in developing countries; and (iii) use a simple accounting framework to find that the contribution of work experience to human capital accumulation and economic development might be as important as the contribution of education itself.

JEL: O11; O12; O15; O47; E24; J11; J31

Keywords: Returns to Work Experience; Returns to Education; Human Capital Accumulation; Economic Development; Labor Markets; Development Accounting

The Financial Center Leverage Cycle: Does it Spread Around the World?

2020, Global Governance, Graciela Laura Kaminsky, Working Papers

February 2020

Graciela Laura Kaminsky, Leandro Medina, Shiyi Wang

IIEP working paper 2020-2

Abstract: With a novel database, we examine the evolution of capital flows to the periphery since the collapse of the Bretton Woods System in the early 1970s. We decompose capital flows into global, regional, and idiosyncratic factors. In contrast to previous findings, which mostly use data from the 2000s, we find that booms and busts in capital flows are mainly explained by regional factors and not the global factor. We then ask, what drives these regional factors. Is it the leverage cycle in the financial center? What triggers the leverage cycle in the financial center? Is it a change in global investors’ risk appetite? Or, is it a change in the demand for capital in the periphery? We link leverage in the financial center to regional capital flows and the cost of borrowing in international capital markets to answer these questions. Our estimations indicate that regional capital flows are driven by supply shocks. Interestingly, we find that the leverage in the financial center has a time-varying behavior, with a movement away from lending to the emerging periphery in the 1970s to the 1990s towards lending to the advanced periphery in the 2000s.

Keywords: International Borrowing Cycles. Global and Regional Factors. Push and Pull Factors of Capital Flows. Financial Center Leverage Cycles.

JEL Codes: F30, F34, F65

 

 

 

Mismatch in Online Job Search

2020, Authors, Tara Sinclair, Working Papers

February 2020

Tara M. Sinclair and Martha E. Gimbel

IIEP working paper 2020-1

Abstract: Labor market mismatch is an important measure of the health of the economy but is notoriously hard to measure since it requires information on both employer needs and job seeker characteristics. In this paper we use data from a large online job search website which has detailed information on both sides of the labor market. Mismatch is measured as the dissimilarity between the distribution of job seekers across a set of predefined categories and the distribution of job vacancies across the same categories. We produce time series measures of mismatch for the US and a set of English-speaking countries from January of 2014 through December of 2019. We find that title-level mismatch is substantial, with about 33% of the labor force needing to change job titles for the US to have zero mismatch in 2019, but that it declined from 40% in 2014 as the labor market has tightened. Furthermore, over the same time period, the mix of job opportunities has shifted substantially, but in a way that has made the overall distribution of jobs more similar to the distribution of job seekers. We interpret this finding as evidence that mismatch between job seekers and employers eased due to jobs coming back in the slow recovery after the Great Recession.

JEL Codes: E24, J11, J21, J24, J40, J62

Keywords: Job search, vacancies, employment, unemployment

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