Mismatch between unemployment and vacancies in the Dutch labour market

We analyse the importance of educational mismatch between vacancies and unemployment in the Dutch labour market. Using unemployment and vacancy data by educational level, we estimate a matching function which incorporates the effect of educational mismatch on the aggregate flow of filled vacancies. Using the estimated parameters, we calculate how much of total unemployment can be attributed to educational mismatch. The results indicate that educational mismatch is not an important determinant of unemployment in the Netherlands. Moreover, it shows a remarkable trend. Contrary to common belief, the relative importance of mismatch appears to have strongly decreased since the end of the 1960s.