| Authors |
Mavrigiannakis, K., Vasilatos, A. and Vella, E. |
| Title |
Fiscal Tightening and Skills Mismatch |
| Abstract |
The paper documents a new link between fiscal tightening and the vertical skills mismatch rate (share of over-qualified workers). Using data for Greece, where this rate exceeds one-third, and a variety of structural Bayesian vector auto regressions and identification strategies, we show that fiscal tightening increases mismatch. We then introduce the latter in a DSGE model with heterogeneous households and labor frictions. In line with the data, a fiscal tightening shock raises the mismatch rate in the model. This result holds for production function specifications both with and without capital-skill complementarity (CSC). |
| Creation Date |
2023-05-30 |
| Keywords |
skills mismatch, fiscal shocks, capital-skill complementarity, SVAR, DSGE model |
| Classification JEL |
J24, F41, J63, E62, |
| File |
2023.Fiscal.Tightening.and.Skills.Mismatch.pdf (7308017 bytes) |
| File-Function |
First version |
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