(FORTUNE Magazine) – It's a truism that labor mobility is key to America's strength in creating jobs and shifting resources to their best economic use. But there's a darker side, says Cornell labor economist John Bishop. Much of the job churn creates needless pain because it comes from a poor match between employees and employers. Bishop's analysis, published by the Brookings Institution, offers lessons -- and remedies. Some 40% of all U.S. workers, Bishop finds, have been in their jobs for less than two years. Half of those in their first year will leave -- or be fired -- during the next year, vs. just 24% for Japanese workers. That hurts. U.S. workers would earn more if they switched less, and employers would save money on recruiting and training. Why are so many Americans mismatched with their jobs? ''Many employers are remarkably casual about their hiring selections,'' says Bishop. But it's hard even for conscientious ones to get good information. Public school transcripts offer scant information on work habits, and wide variations in grading standards render academic performance measures suspect. Finally, U.S. employers worry that workers will sue them for giving poor recommendations. Bishop found that talks with former supervisors are the most useful in predicting job performance, followed by references from the employer's own friends and relatives or another employee. Letters from human-resources departments offer little help. Says Bishop: ''Some personnel offices are in the lemon-marketing business.'' The least useful hiring channel proved to be the U.S. Department of Labor's Employment Service, the nation's principal public employment agency. Since the mid-1960s, says Bishop, the service has focused on placing workers with real or perceived disadvantages. ''It has became an advocacy weapon for affirmative action on behalf of targeted populations,'' he says. As a result, the Service has steadily lost credibility with employers. By the late 1980s, it placed fewer than 18% of the 18.4 million job seekers requesting its help. Bishop urges U.S. companies to take a lesson from Japanese employers, who maintain long-standing referral relationships with local schools. The Employment Service would improve its performance if it were to simply list all job openings in convenient public places and on computer bulletin boards that would allow job seekers and employers to find each other.

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