Evaluating New LinkedIn Labor Market Tightness Indicators

RePEc Short ID: pwe496
ORCID iD: 0000-0002-4022-0249

Li, Elizabeth; Topa, Giorgio; Weber, Jacob P.

doi:10.59576/lse.20261030

Discussion Paper

Evaluating New LinkedIn Labor Market Tightness Indicators

Abstract: Measures of labor market tightness (LMT) describe how difficult it is for firms to find workers. The labor market is considered tight if there are few job seekers available relative to job openings, implying stronger wage pressures as employers compete for scarce job seekers. Thus, good measures of LMT are important for predicting wage inflation and calibrating monetary policy. Recently, the hiring platform LinkedIn began producing three innovative LMT measures based on its user data. In this post, we use public data from the Job Openings and Labor Turnover Survey (JOLTS) and the Bureau of Labor Statistics (BLS) to evaluate the ability of these novel measures to predict wage and price inflation relative to existing LMT measures, finding that one stands out as particularly useful and timely.

JEL Classification: E24; E31;

https://doi.org/10.59576/lse.20261030