It´s a Kind of Matching

Labour market mismatch has traditionally been thought of in the context of unemployment, as opposed to a skills mismatch after educational attainment. According to Soininen´s PhD thesis (2006), the ´matching function´ and the Beveridge curve are two extensively utilized relationships in labour economics.

The Beveridge curve describes the negative, convex to origo relationship between vacancies and unemployed, which is the outcome of the matching function. The name derives from William Beveridge, an English social politician, who discovered the relationship in the 1930s. Being far down on the Beveridge curve indicates that a low number of vacancies corresponds to high unemployment and being far up on the curve indicates that a high number of vacancies corresponds to low unemployment... The matching function was first mentioned at the end of the 1970s in the economics literature.

In the contemporary literature, Budria and Moro-Egido (2004) "differentiate between three different types of educational mismatch: ‘over-qualification’, ‘incorrect qualification’, and ‘strong mismatch’." They find that while over-qualification and incorrect qualification are not associated with lower wages, strong mismatch carries a pay penalty that ranges from 13% to 27%. Strong (or skills) mismatch is a particular interest, particularly after attainment of PhD qualifications.

But given the mention of the Beveridge Curve above, here is an interesting discussion about the relationship between vacancies and unemployment in the contemporary British economy.