Search Results
A Hard or Soft Landing? The Answer May Lie in the Beveridge Curve
The traditional Beveridge curve suggests that a sharp rise in unemployment is needed to meaningfully lower the job vacancy rate. But the curve shaped by the pandemic labor market may signal a different result.
Working Paper
The Dual Beveridge Curve
When firms decide to post a vacancy they can hire from the pool of unemployed workers or they can poach a worker from another firm. In this paper we show that if there are two different matching processes, one for unemployed workers and another one for job-to-job transitions, then implications for the Beveridge curve are potentially very different, influencing the effects of monetary policy on unemployment. We show that over the years the hiring process and how job postings are used as an input into this process has changed dramatically.
Does Employers’ Worker Poaching Explain the Beveridge Curve’s Odd Behavior?
Increased worker job-hopping may help explain the odd-shaped post-COVID Beveridge curve and the underlying employment behavior it depicts.
Working Paper
The Shifting Reasons for Beveridge-Curve Shifts
We discuss how the relative importance of factors that contribute to movements of the U.S. Beveridge curve has changed from 1960 to 2023. We review these factors in the context of a simple flow analogy used to capture the main insights of search and matching theories of the labor market. Changes in inflow rates, related to demographics, accounted for Beveridge curve shifts between 1960 and 2000. A reduction in matching efficiency, that depressed unemployment outflows, shifted the curve outwards in the wake of the Great Recession. In contrast, the most recent shifts in the Beveridge curve ...
Is a Soft Landing Possible? What the Beveridge Curve Reveals
Adjusting the Beveridge curve to exclude the effect of workers switching jobs suggests that the vacancy rate could fall to pre-pandemic levels without causing the U.S. jobless rate to exceed a 2001-23 average.
Working Paper
The Dual Beveridge Curve
The recent behavior of the Beveridge Curve has been puzzling, significantly differs from past recessions, and is hard to explain with traditional gradual changes in fundamentals. We propose a novel dual-vacancy model that rationalizes this recent puzzling behavior, by acknowledging that not all vacancies are made equal—when firms post a vacancy they can fill it with an unemployed worker or they can fill it with an already employed worker—and by assuming that there are two separate search and matching processes, one for unemployed workers and another for the employed workers. By analyzing ...
Working Paper
(Re-)Connecting Inflation and the Labor Market: A Tale of Two Curves
We propose an empirical framework in which shocks to worker reallocation, aggregate activity, and labor supply drive the joint dynamics of the labor market and inflation, and where reallocation shocks take two forms depending on whether they result from quits or from job losses. We find that these structural shocks, which affect the Beveridge curve, have different effects on inflation. Our model fully decomposes shifts of or along the empirical Beveridge curve in terms of the contribution of each shock and also allows us to estimate the Phillips correlation associated with each shock; ...
Working Paper
The Dual Beveridge Curve
When firms decide to post a vacancy they can hire from the pool of unemployed workers or they can poach a worker from another firm. In this paper we show that if there are two different matching processes, one for unemployed workers and another one for job-to-job transitions, then implications for the Beveridge curve are potentially very different, influencing the effects of monetary policy on unemployment. We show that over the years the hiring process and how job postings are used as an input into this process have changed dramatically.
Journal Article
Finding a Soft Landing along the Beveridge Curve
As U.S. economic growth slows this year, a key question is whether job openings can fall from historical highs without a substantial rise in unemployment. Analyzing the current Beveridge curve relationship between unemployment and job openings presents a meaningful possibility that labor market pressures can ease and achieve a “soft landing” with only a limited increase in unemployment. This view is supported by high rates of job matching in the U.S. labor market in 2022, despite ongoing employment reallocation across industries.
The Beveridge Curve and Structural Barriers in the Labor Market
Beveridge curves for vulnerable groups, especially single mothers, differ from the overall workforce, meaning structural barriers to the job matching process exist.