Our website will undergo scheduled maintenance on March 6th, 2024. During this time, connection to our website and some of its features may be unavailable. Thank you for your patience, and we apologize for any inconvenience.

Journal Article

Shifts in the Beveridge Curve, job matching, and labor market dynamics

Abstract: The Beveridge curve -- the scatter plot of unemployment rates versus vacancy rates -- has recently shifted inward dramatically. While the Beveridge curve is often used to summarize the state of the labor market, it is not a structural economic relationship. Thus, in order to understand the labor market implications of recent shifts in the curve, we must first understand the labor market activities that give rise to the Beveridge curve.> This article examines the Beveridge curve over the past 30 years. The authors discuss some of the issues surrounding the job-matching process and attempt to estimate the extent to which changes in the job-matching function are responsible for changes in the position of the Beveridge curve. They also consider other potential sources of shifts in the Beveridge curve, including shifts in the age and gender composition of the labor force and changes in the amount of \"churning\" in the labor market. They find significant increases in matching efficiency, significant drops in labor force growth, and a decrease in labor force churning, the sum of which account for the inward shift in the Beveridge curve since 1987.

Keywords: Unemployment;

Access Documents

File(s): File format is application/pdf http://www.bostonfed.org/economic/neer/neer1997/neer597a.pdf


Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: New England Economic Review

Publication Date: 1997

Issue: Sep

Pages: 3-19