The Labour Market and Skill Mismatches
| Autor | Jeisson Cárdenas Rubio |
| Páginas | 14-42 |
14 C
A WEB -BASE D APPRO ACH TO M E A SU R E S KILL MISM ATCHE S AND S KILL S PROFI LES FO R A DEV ELOPI NG COUN TRY
2. The Labour Market
and Skill Mismatches
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2.1. Introduction
The labour ma rket can be defined as a “place” (not neces sarily a physical place)
where employers (“demand”) a nd workers (“supply”) interact with e ach other.
The dyna mics of this labour ma rket are relevant for an economy a s they deter-
mine dif ferent socio-economic outputs, s uch as productivity, unemployme nt,
wages, and povert y, among others. Provided that t he labour market influence s
various outcome s and different di sciplines address thes e issues (e.g. sociology,
economy, etc.), this chapter disc usses labour ma rket definitions and expla ins
the theoretica l framework adopte d throughout th is book to analys e labour
demand based on t he information fou nd on online job port als.
The second section of t his chapter explain s what is understood by labour
demand and labou r supply in the academic literatu re on economics, and pos-
sible ways to statis tically measu re these concepts. More over, it defines and
highlight s informal economy as a key i ssue, especially in L atin American cou n-
tries lik e Colombia. Subsequently, the concept of s kills is int roduced, and its
possible implication s for unemployment and inform al economy are explained .
With these bas ic definitions outlined , the third section of the c hapter describes
the Colombian labou r market and its main outcomes, s uch as unemployment,
wages, etc., under the a ssumption of perfect competition .
However, the assumpt ions of perfect competition a re substantial a nd might
not be appropriate for di fferent economies s uch as the Colombian economy.
Consequently, it is necessa ry to consider labour ma rket failures— for example,
imperfect in formation— that might appropr iately expla in the comparative ly
high rates of infor mal economy and unemployment levels i n Colombia. Thus,
the fourt h section of this chapter foc uses on explaini ng how imperfect inform a-
tion might increa se skill mismatches a nd, consequently, create labour ma rket
segmentation bet ween formal and infor mal workers along wit h a comparatively
high unemploy ment rate, proposing thus th at information fail ures might be one
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