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Panel Data Analysis of the Beveridge Curve: Is There a Macroeconomic Relation between the Rate of Unemployment and the Vacancy Rate?

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  • Borsch-Supan, Axel H

Abstract

This study investigates whether the Beveridge curve--the relation between vacancy and unemployment rate--is helpful for the quantification of structural unemployment. Since aggregate time series are too short to test detailed hypotheses about the Beveridge curve, the author assembles a panel of nine regions in West Germany. Analyses of these data produce little support for a structural macroeconomic interpretation of the Beveridge curve. The observed shifts of the Beveridge curve are too sudden to be explained by structural changes; there is evidence for aggregation bias; and variables associated with structural unemployment do not substitute for the explanatory power of dummy variables for the observed shifts while cyclical variables do so. Copyright 1991 by The London School of Economics and Political Science.

Suggested Citation

  • Borsch-Supan, Axel H, 1991. "Panel Data Analysis of the Beveridge Curve: Is There a Macroeconomic Relation between the Rate of Unemployment and the Vacancy Rate?," Economica, London School of Economics and Political Science, vol. 58(231), pages 279-297, August.
  • Handle: RePEc:bla:econom:v:58:y:1991:i:231:p:279-97
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    Cited by:

    1. Reinhold Kosfeld & Christian Dreger & Hans-Friedrich Eckey, 2008. "On the stability of the German Beveridge curve: a spatial econometric perspective," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(4), pages 967-986, December.
    2. Gorter, C. & Ours, J.C., 1992. "Matching unemployment and vacancies in regional labour markets : an empirical analysis for the Netherlands," Serie Research Memoranda 0044, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    3. Vansteenkiste, Isabel, 2017. "Did the crisis permanently scar the Portuguese labour market? Evidence from a Markov-switching Beveridge curve analysis," Working Paper Series 2043, European Central Bank.
    4. Gabriele R. & Fagiolo G. & Dosi G., 2004. "Towards an Evolutionary Interpretation of Aggregate Labor Market Regularities," Computing in Economics and Finance 2004 84, Society for Computational Economics.
    5. Jerome Fahrer & Andrew Pease, 1993. "The Unemployment/Vacancy Relationship in Australia," RBA Research Discussion Papers rdp9305, Reserve Bank of Australia.
    6. Boele Bonthuis & Valerie Jarvis & Juuso Vanhala, 2016. "Shifts in euro area Beveridge curves and their determinants," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-17, December.
    7. Tommaso Ciarli & André Lorentz & Maria Savona & Marco Valente, 2010. "The Effect Of Consumption And Production Structure On Growth And Distribution. A Micro To Macro Model," Metroeconomica, Wiley Blackwell, vol. 61(1), pages 180-218, February.
    8. Rodenburg, Peter, 2007. "The Remarkable Place of the UV-Curve in Economic Theory," MPRA Paper 5823, University Library of Munich, Germany.
    9. Owyang, Michael T. & Rapach, David E. & Wall, Howard J., 2009. "States and the business cycle," Journal of Urban Economics, Elsevier, vol. 65(2), pages 181-194, March.
    10. Jorge Lopez Tamayo & Jordi Surinach Caralt, 1999. "El desempleo espanol: factores estructurales," Working Papers in Economics 53, Universitat de Barcelona. Espai de Recerca en Economia.
    11. Jordi Lopez-Tamayo, 1998. "A regional panel data analysis of the Spanish Beveridge curve," ERSA conference papers ersa98p97, European Regional Science Association.
    12. Nicolaas Groenewold, 2001. "Long-Run Shifts of the Beveridge Curve and the Frictional Unemployment Rate in Australia," Economics Discussion / Working Papers 01-09, The University of Western Australia, Department of Economics.
    13. Peter Diamond, 2013. "Cyclical Unemployment, Structural Unemployment," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(3), pages 410-455, August.
    14. Robert Dixon & John Freebairn & Emayenesh Seyoum-Tegegn, 2008. "State & Territory Beveridge Curvesand the National Equilibrium Unemployment Rate," Department of Economics - Working Papers Series 1033, The University of Melbourne.
    15. Hagen, Tobias, 2003. "Three Approaches to the Evaluation of Active Labour Market Policy in East Germany Using Regional Data," ZEW Discussion Papers 03-27, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    16. Kasrin Zein & Lang Guenter, 2013. "Estimating the Beveridge Curve of Egypt: An Econometric Study for the Period 2004 to 2010," Review of Middle East Economics and Finance, De Gruyter, vol. 8(3), pages 1-16, January.
    17. Wall, Howard J & Zoega, Gylfi, 2002. " The British Beveridge Curve: A Tale of Ten Regions," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(3), pages 261-280, July.
    18. Sell, Friedrich L. & Reinisch, David C., 2013. "How do Beveridge and Phillips curves in the euro area behave under the stress of the world economic crisis?," Working Papers in Economics 2013,1, Bundeswehr University Munich, Economic Research Group.
    19. Robert G. Valletta, 2005. "Why has the U.S. Beveridge curve shifted back? new evidence using regional data," Working Paper Series 2005-25, Federal Reserve Bank of San Francisco.

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