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Mexico's Labor Market through the Lens of the Beveridge Curve

Author

Listed:
  • Luis Fernando Colunga
  • Miroslava Quiroga-Trevino
  • Irina Panovska
  • Prajyna Barua
  • B. Elam Rodríguez-Alcaraz

Abstract

This paper constructs the first Beveridge Curves for Mexico and its regions using a newly compiled dataset on formal-sector job vacancies. A new measure of labor market slack for Mexico, based on the vacancies to unemployment (V/U) ratio, is introduced and used to explore national and regional Phillips Curves. Incorporating this novel vacancy dataset also makes it possible to identify structural macroeconomic shocks and analyze business cycle dynamics at both the national and regional levels through the estimation of a Structural Bayesian VAR model. The results show that unemployment dynamics are mainly driven by labor supply and matching efficiency shocks, while wage bargaining shocks explain most of the variation in vacancies at the national level, with notable heterogeneity across regions.

Suggested Citation

  • Luis Fernando Colunga & Miroslava Quiroga-Trevino & Irina Panovska & Prajyna Barua & B. Elam Rodríguez-Alcaraz, 2026. "Mexico's Labor Market through the Lens of the Beveridge Curve," Working Papers 2026-07, Banco de México.
    • Handle: RePEc:bdm:wpaper:2026-07
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    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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