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The Dual Beveridge Curve


Abstract: The U.S. Beveridge curve’s recent outward shift has puzzled economists. We argue that the key stylized fact requiring a new framework is the divergence between surging vacancies and stable hires from unemployment. We propose a dual-vacancy model that attributes this divergence to a rising share of “poaching” vacancies targeted at employed workers. The model’s core identification reveals a disconnect: the data force a conclusion that poaching vacancies account for most vacancy fluctuations, yet have a surprisingly small impact on actual job-to-job hiring. This mechanism is validated by a new empirical fact: across sectors, vacancy rates converged post-2010 while hiring strategies diverged—a puzzle our framework uniquely resolves. Estimating the model, we find that the share of poaching vacancies rose significantly, driven by an increased incentive to poach. Adjusting the Beveridge curve for this composition shift restores its historical stability.

JEL Classification: E52; J23; J63; J64;

https://doi.org/10.20955/wp.2022.021

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Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2025-09-29

Number: 2022-021

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