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Vocational training, labour market mobility and reducing frictional unemployment

Paris School of Economics - PARIS - 2022

The Covid health crisis, like other macroeconomic shocks, is likely to affect certain sectors and occupations asymmetrically. These imbalances in the labour markets imply a need to rebalance labour movements (from low-tension markets to high-tension markets) in order to reduce “mismatch unemployment”. But how can such occupational mobility be facilitated? Some of this occupational mobility is made impossible by a lack of adequate skills in the workforce affected by negative demand shocks on the labour market. Against this background, vocational training could be the appropriate tool to be implemented by the public policy maker. This research project aims to investigate the extent to which vocational training financed by public policy makers has the capacity to reduce these labour market imbalances.