Using National Longitudinal Survey of Youth data on tenure and wages,
this article analyzes the extent to which the level of job mismatching
varies over the business cycle and how it is dealt with by the labor
market. I find significant cyclical variation in job match quality and
an internalization of the variation by the labor market through wages
. Mismatching occurs more during recessions but is primarily captured
in starting wages. The evidence suggests the cyclical phenomenon is on
e of general mismatching rather than an increased number of stopgap jo
bs during recessions.