Has mismatch got us down? Skills and productivity in Canada

This paper uses Canadian data to examine the link between worker-job mismatch and productivity. We measure mismatch by comparing worker education to occupational skill requirements in the Labour Force Survey (LFS) merged with industrial aggregates of a labor productivity index for the period 1997Q1-2014Q1. Economy-wide mismatch shares appear to have little importance for productivity. Instead, we show that the consequences of mismatch for aggregate productivity depend on precisely which type of workers and which types of jobs are mismatched. Productivity is dampened most when university educated workers are employed in occupations generally requiring community-college or high school education, thus leaving human capital idle.