US – Employability makes unemployment to trickles down to lower-skilled workers research finds

Unemployment “trickles down” to America’s poorest and most vulnerable because, during recessions, higher-income workers with more education take jobs that are below their qualification level, according to new research.

Such underemployment, in turn, leaves fewer job openings for which the so-called lower-skilled workers are qualified.

“Some high-skill workers move down the occupational ladder in order to find a job more easily,” write Regis Barnichon and Yanos Zylberberg, economists at CREI, Universitat Pompeu Fabra, in Barcelona. “Through this process, unemployment trickles down from the upper-occupation groups to the lower-occupation groups, so that high-skill workers enjoy not only higher expected income but also lower income volatility.”

“Job competition is biased and favors high skills, because a high-skill worker applying to a low-skill job is systematically hired over competing low-skill applicants,” the CREI research paper finds.

“Trickle-down unemployment can be a powerful redistributive mechanism” that further boosts already historically elevated levels of income inequality, the authors add.

Chosen excerpts by Job Market Monitor. Read the whole story at Unemployment Trickles Down to Poorer Workers, Study Finds – Real Time Economics – WSJ.

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