Reflections on the Economics Nobel, I: Jobs, jobs everywhere, but none for you

There's a company here in Philadelphia that is constantly advertising openings for copywriters and other writing- and editing-oriented positions. That's my specialty. So why haven't I gotten a job there?

Because I'm not the type of writer they're looking for - and judging from their constant posting of positions, including some that have been open since March, they're having a hard time finding the type of writer they're looking for.

This sort of "friction" in the functioning of labor markets is the focus of the research that won the economists who conducted it the 2010 Nobel Memorial Prize in Economic Sciences.

Peter Diamond of MIT, Dale Mortensen of Northwestern University and Christopher Pissarides of the London School of Economics shared the prize for developing a theoretical framework for understanding how "search markets" work. "Search markets" - the labor and housing markets are the biggest and best known examples - don't function with the efficiency of other markets because the buyers and sellers can't always find each other easily. In the example I give above, the company wants writers who have prior experience writing pharmaceutical marketing copy. That company probably gets thousands of applications from writers who lack that qualification. Some other sources of inefficiency in the job market include geographic mismatch - the job seeker is in Philadelphia, but the dream job is in Minneapolis - and limited or imperfect information - as we all have heard, many available jobs are not even advertised, and job seekers cannot tap into all the possible sources of information about available jobs and thus may miss advertised jobs they qualify for.

The net result, as the prizewinning economists' mathematical models demonstrate, is that high unemployment can exist in labor markets with lots of available job openings, because the job buyers and job sellers both can't find what they're looking for.

In the next installment in this series: Unemployment compensation keeps people jobless longer - and that's a good thing.

Improve the odds of finding what you're looking for at http://www.philyjobs.com/

By: Sandy Smith

Sandy Smith is an award-winning writer and editor who has spent most of his career in public relations and corporate communications. His work has appeared in The Philadelphia Inquirer, the Philadelphia CityPaper, PGN, and a number of Web sites. Philly-area residents may also recognize him as "MarketStEl" of discussion-board fame. He has been a part of the great reserve army of freelance writers since January 2009 and is actively seeking opportunities wherever they may lie.