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Shifting the Beveridge curve: What affects labour market matching?

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  • Elva BOVA
  • João TOVAR JALLES
  • Christina KOLERUS

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.

Suggested Citation

  • Elva BOVA & João TOVAR JALLES & Christina KOLERUS, 2018. "Shifting the Beveridge curve: What affects labour market matching?," International Labour Review, International Labour Organization, vol. 157(2), pages 267-306, June.
  • Handle: RePEc:bla:intlab:v:157:y:2018:i:2:p:267-306
    DOI: 10.1111/ilr.12046
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    1. Bhuller, Manudeep & Kostøl, Andreas & Vigtel, Trond Christian, 2019. "How Broadband Internet Affects Labor Market Matching," Memorandum 10/2019, Oslo University, Department of Economics.
    2. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2019. "What if supply-side policies are not enough? The perverse interaction of flexibility and austerity," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 360-388.
    3. Hannah Sheldon, 2020. "The Beveridge curve and equilibrium unemployment," Economics Bulletin, AccessEcon, vol. 40(4), pages 3182-3192.
    4. Jalles, João Tovar, 2017. "On the rationality and efficiency of inflation forecasts: Evidence from advanced and emerging market economies," Research in International Business and Finance, Elsevier, vol. 40(C), pages 175-189.
    5. Ambra Poggi, 2019. "Regional labour markets in Spain: Can flexibility and local democracy reduce inefficiencies?," Papers in Regional Science, Wiley Blackwell, vol. 98(3), pages 1499-1516, June.
    6. Sergio Destefanis & Matteo Fragetta & Nazzareno Ruggiero, 2020. "Active and passive labour-market policies: the outlook from the Beveridge curve," Working Papers 3_239, Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno, revised Jun 2020.
    7. Hutter, Christian & Klinger, Sabine & Trenkler, Carsten & Weber, Enzo, 2019. "Which factors are behind Germany's labour market upswing?," IAB Discussion Paper 201920, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Finn Robinson, 2020. "Vacancies, unemployment and labour market slack in New Zealand," Reserve Bank of New Zealand Analytical Notes series AN2020/07, Reserve Bank of New Zealand.

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