Shifting the Beveridge curve: What affects labour market matching?

Abstract

This article explores short‐run determinants of the matching between labour demand and supply by identifying shifts in the Beveridge curves for 12 OECD countries between 2000Q1 and 2013Q4. Using three complementary methodologies (visual examination, cointegration techniques and non‐linear estimations), we find that labour force growth and employment protection legislation reduce the likelihood of outward shifts, and the higher the share of employees with intermediate levels of education and the long‐term unemployment, the more difficult the matching process. Active labour market policies (such as incentives for start‐ups or job‐sharing programmes) could facilitate matching, while passive policies (unemployment benefits or labour taxation) make matching significantly more difficult.

How Broadband Internet Affects Labor Market Matching

“…Our findings suggest that information frictions may contribute to the mismatch between job seekers and vacancies. Improvements in job search technology would, therefore, lead to an inward shift in the Beveridge curve -the negatively sloped relationship between job vacancies and unemployment -which has been observed in several countries from the 1990s to the early 2000s (see, e.g., Bova et al , 2018). Using our regional evidence on flows in and out of unemployment, we calculate that the steady-state unemployment rate in 2012 would have been 10-25 percent higher in the absence of broadband internet.…”

Which factors were behind Germany's labour market upswing? A data‐driven approach*

“…The ratio of the two is interpreted as labour market tightness. The figure provides important insights into the nature of the upswing: Following the Hartz reforms of 2003–06, the curve shifted inwards – which was also exceptional by international comparison (Bova, Jalles and Kolerus, 2018). The inward shift indicates better functioning of the labour market (compare Blanchard and Diamond, 1989) and has been connected to improved matching efficiency (Klinger and Weber, 2016; Launov and Wälde, 2016).…”

Is Singapore's Beveridge Curve Suffering from Long Covid Shifts?

“…These changes include shifts in the labour force characteristics and composition (Bonthuis et. al, 2016), matching technology (Bleakley and Fuhrer, 1997;Shimer, 2012), labour market institutions and policies (Nickell and Layard, 1999), and unemployment hysteresis (Bova et al, 2018).…”