Learning about match quality: Information flows and labor market outcomes

Workers with lower skills have higher unemployment rates. This is because they are more likely to become unemployed, not because they are less likely to find a job. Thus, understanding the differences between skill groups in the probability of becoming unemployed is crucial to understanding the gap between their unemployment rates. This paper analyzes to what extent these differences come from variations in information frictions about the suitability of an employee for the job (match quality) by skill.