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The Beveridge curve in Europe: new evidence using national and regional data

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  • F. Bouvet

Abstract

The Beveridge curve depicts the empirical negative relationship between job vacancy rate and unemployment rate, and reflects the efficiency of the job matching process. Movements along a fixed downward sloping Beveridge curve are associated with cyclical shocks, while shifts of the curve arise from structural factors that alter the matching efficiency between job vacancies and unemployed workers. National and regional data on job vacancies and unemployment are combined to estimate the Beveridge curves of five European countries and their regions, focusing on the period 1975 to 2004. I also analyse whether shifts in European Beveridge curves are due to changes in the composition of the unemployed pool, labour market rigidities or cyclical and structural shocks. The empirical evidence suggests that changes in labour market rigidities, long term unemployment, as well as cyclical shocks are responsible for outward shifts in European Beveridge curves. I also find evidence of nonlinearities in the relation between unemployment and labour market institutions.

Suggested Citation

  • F. Bouvet, 2012. "The Beveridge curve in Europe: new evidence using national and regional data," Applied Economics, Taylor & Francis Journals, vol. 44(27), pages 3585-3604, September.
    • Handle: RePEc:taf:applec:44:y:2012:i:27:p:3585-3604
    DOI: 10.1080/00036846.2011.579062
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    References listed on IDEAS

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    1. Caselli, Francesco, 2005. "Accounting for Cross-Country Income Differences," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 9, pages 679-741, Elsevier.
    2. 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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    Cited by:

    1. Luis Alberiko A. Gil-Alana & María Jesús González-Blanch & Carlos Poza, 2025. "Labour market mismatches in G7 countries: a fractional integration approach," Applied Economics, Taylor & Francis Journals, vol. 57(7), pages 736-752, February.
    2. 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.
    3. Bart Hobijn & Aysegul Sahin, 2013. "Beveridge Curve Shifts across Countries since the Great Recession," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(4), pages 566-600, December.
    4. Mark J. Holmes & Jesús Otero, 2020. "The Beveridge Curve Across US States: New Insights From a Pairwise Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(2), pages 405-424, April.
    5. Valentina Ioana Cheregi, 2025. "Is labor matching effectiveness dependent on education level, age or gender?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 25(1), pages 1-20.
    6. Klinger, Sabine & Weber, Enzo, 2014. "Decomposing Beveridge curve dynamics by correlated unobserved components: The impact of labour market reforms in Germany," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100499, Verein für Socialpolitik / German Economic Association.
    7. Tommaso Ciarli & André Lorentz & Marco Valente & Maria Savona, 2019. "Structural changes and growth regimes," Journal of Evolutionary Economics, Springer, vol. 29(1), pages 119-176, March.
    8. Samuel Bentolila & Juan J. Dolado & Pierre Cahuc & Thomas Le Barbanchon, 2010. "Two-Tier Labor Markets in the Great Recession: France Vs. Spain," Working Papers wp2010_1009, CEMFI.
    9. Cristina Lincaru, 2010. "Reginal Mismatch Tendencies In Romania-Evidence From Beveridge Curve," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 4(2), pages 32-61, DECEMBER.
    10. Richard Dutu & Mark J. Holmes & Brian Silverstone, 2016. "Modelling A Regime-Shifting Beveridge Curve," Bulletin of Economic Research, Wiley Blackwell, vol. 68(1), pages 90-104, January.
    11. Sabine Klinger & Enzo Weber, 2016. "Decomposing Beveridge Curve Dynamics By Correlated Unobserved Components," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 877-894, December.
    12. Ruesga, Santos M. & Da Silva Bichara, Julimar & Pérez Trujillo, Manuel, 2015. "La Gran Recesión y sus efectos sobre la eficiencia del mercado laboral. Un estudio aplicado a nivel regional para determinar el mismatch agregado en España /The Great Recession and its Effects on Labo," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 33, pages 175-200, Enero.
    13. Paternesi Meloni, Walter & Romaniello, Davide & Stirati, Antonella, 2022. "Inflation and the NAIRU: assessing the role of long-term unemployment as a cause of hysteresis," Economic Modelling, Elsevier, vol. 113(C).
    14. Marcela Kantová & Šárka Prudká & Markéta Arltová & Magdaléna Kotýnková, 2018. "Efektivita trhu práce ve světle opatření konceptu flexikurity: příklad České republiky a Švédska v období 20062015 [Efficiency of Labour Market Policy Changes in the Czech Republic and Sweden in 2006-2015]," Politická ekonomie, Prague University of Economics and Business, vol. 2018(4), pages 411-429.
    15. 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.
    16. Hugo Erken & Eric van Loon & Wouter Verbeek, 2015. "Mismatch on the Dutch labour market in the Great Recession," CPB Discussion Paper 303.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    17. Marina Ferent-Pipas & Gabriel Armean, 2016. "Examining European Business Environments And Labour Markets. A Country-Clustering Proposal," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 351-362, July.
    18. repec:eub:ecoecr:v:3:y:2017:i:1:p:3-20 is not listed on IDEAS
    19. Hermann Gartner & Thomas Rothe & Enzo Weber, 2024. "The Quality‐Weighted Matching Function: Did the German Labor Market Reforms Trade‐Off Efficiency against Job Quality?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(7), pages 1905-1914, October.
    20. Hugo Erken & Eric van Loon & Wouter Verbeek, 2015. "Mismatch on the Dutch labour market in the Great Recession," CPB Discussion Paper 303, CPB Netherlands Bureau for Economic Policy Analysis.
    21. Dorin JULA & Nicolae Marius JULA, 2017. "Mixed Sampling Panel Data Model for Regional Job Vacancies Forecasting," Eco-Economics Review, Ecological University of Bucharest, Economics Faculty and Ecology and Environmental Protection Faculty, vol. 3(1), pages 3-20, June.
    22. Ferent-Pipas Marina, 2016. "Beveridge Curve Shifts – Europe 2020 Perspectives," Scientific Annals of Economics and Business, Sciendo, vol. 63(3), pages 321-331, November.
    23. Gina Cristina Dimian & Bogdan Ileanu & Josef Jablonský & Jan Fábry, 2013. "Analysis of European Labour Market in the Crisis Context," Prague Economic Papers, Prague University of Economics and Business, vol. 2013(1), pages 50-71.
    24. Christl, Michael, 2020. "A Beveridge curve decomposition for Austria: did the liberalisation of the Austrian labour market shift the Beveridge curve?," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 54, pages 1-007.

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