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What’s going on behind the euro area Beveridge curve(s)?

Author

Listed:
  • Vanhala, Juuso
  • Bonthuis, Boele
  • Jarvis, Valerie

Abstract

This paper studies unemployment and vacancy developments in the euro area at the aggregate and country level over the Great Recession. The recent crisis has had a heterogeneous impact on euro area labour markets, leading to significant employment losses, especially in some sectors. The extent to which the rise in unemployment and particularly long-term unemployment reflects growing mismatch across euro area labour markets is one of the biggest questions facing euro area labour market policy makers. This paper attempts to shed light on this question by analysing developments in euro area Beveridge curves over the past 20 years, at both the aggregate level and on a disaggregated basis for all euro area countries. Using a simple model of Beveridge curve developments, we test for statistical significance of observed developments and find a significant shift in the euro area Beveridge curve since the onset of the crisis, but considerable heterogeneity at the country level. At the extremes, country level differences include a significant outward shift in the Beveridge curve for Spain and France, an inward shift for Germany, while some euro area countries reveal no significant changes in the responsiveness of unemployment to vacancy developments over the course of the crisis. We include an examination of factors underlying the observed developments across the countries. JEL Classification: J62, J63, E24, E32

Suggested Citation

  • Vanhala, Juuso & Bonthuis, Boele & Jarvis, Valerie, 2013. "What’s going on behind the euro area Beveridge curve(s)?," Working Paper Series 1586, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:20131586
    Note: 1725816
    as

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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp1586.pdf
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    References listed on IDEAS

    as
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    10. Regis Barnichon & Michael Elsby & Bart Hobijn & Aysegül Sahin, 2010. "Which industries are shifting the Beveridge curve?," Working Paper Series 2010-32, Federal Reserve Bank of San Francisco.
    11. Julen ESTEBAN-PRETEL & FUJIMOTO Junichi, 2011. "Life-Cycle Search, Match Quality and Japan's Labor Flow," Discussion papers 11041, Research Institute of Economy, Trade and Industry (RIETI).
    12. 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.
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    14. Regis Barnichon & Andrew Figura, 2011. "What drives matching efficiency? a tale of composition and dispersion," Finance and Economics Discussion Series 2011-10, Board of Governors of the Federal Reserve System (U.S.), revised 2011.
    15. Nicolaas Groenewold, 2003. "Long-Run Shifts of the Beveridge Curve and the Frictional Unemployment Rate in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(1), pages 65-82, March.
    16. Henry S. Farber, 2012. "Unemployment in the Great Recession: Did the Housing Market Crisis Prevent the Unemployed from Moving to Take Jobs?," American Economic Review, American Economic Association, vol. 102(3), pages 520-525, May.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Comment s'est comportée la courbe de Beveridge en zone euro ?
      by Martin Anota in D'un champ l'autre on 2015-02-20 19:29:55

    Citations

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    Cited by:

    1. Sergio Destefanis & Giuseppe Mastromatteo, 2016. "The Beveridge Curve in the OECD. Before and after the great recession," Working Papers 5, Department of the Treasury, Ministry of the Economy and of Finance.
    2. Christl, Michael, 2019. "A Beveridge curve decomposition for Austria: What drives the unemployment rate?," Working Papers 17, Agenda Austria.
    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. Hart, Janine & Clemens, Marius, 2019. "A search and matching approach to business-cycle migration in the euro area," Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203659, Verein für Socialpolitik / German Economic Association.
    5. 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.
    6. Brian Micallef, 2016. "A Multivariate Filter to Estimate Potential Output and NAIRU for the Maltese Economy," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(5), pages 13-22, May.
    7. Marco Guerrazzi, 2016. "Increasing Returns in Matching and Labour Market Dynamics: Comments on Indeterminacy and Search Theory," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 15(1), pages 85-88, June.
    8. Christl, Michael, 2019. "A Beveridge curve decomposition for Austria," Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203551, Verein für Socialpolitik / German Economic Association.
    9. Athanasios O. Tagkalakis, 2016. "Unemployment dynamics and the Beveridge curve in Greece," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-34, December.
    10. International Monetary Fund, 2014. "Baltic Cluster Report; Selected Issues," IMF Staff Country Reports 14/117, International Monetary Fund.
    11. 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.
    12. Christian H Ebeke & Greetje Everaert, 2014. "Unemployment and Structural Unemployment in the Baltics," IMF Working Papers 14/153, International Monetary Fund.
    13. Anderton, Robert & Maria, José R. & Karšay, Alexander & Szörfi, Béla & Périnet, Mathilde & Petroulas, Pavlos & Beck Nelleman, Peter & Conefrey, Thomas & Veiga, Cindy & Zizza, Roberta & Verdugo, Gregor, 2015. "Comparisons and contrasts of the impact of the crisis on euro area labour markets," Occasional Paper Series 159, European Central Bank.
    14. A. Maravalle. & M.-E. de la Serve. & G. Verdugo., 2014. "The euro area Beveridge curve in the post-crisis period: increase in structural unemployment since 2010," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 36, pages 95-109, winter.
    15. POLIMENI John M. & IORGULESCU Raluca Ioana, 2015. "Inquiry Regarding The Sustainability Of Active Labor Market Policies In Romania," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 0, pages 134-143, July.
    16. Arpaia, Alfonso & Kiss, Aron & Turrini, Alessandro, 2014. "Is Unemployment Structural or Cyclical? Main Features of Job Matching in the EU after the Crisis," IZA Policy Papers 91, Institute of Labor Economics (IZA).
    17. 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.
    18. 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.
    19. repec:ecb:ecbops:2008159 is not listed on IDEAS
    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. Michael Christl & Monika Köppl–Turyna & Dénes Kucsera, 2016. "Structural unemployment after the crisis in Austria," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-36, December.

    More about this item

    Keywords

    Beveridge Curve; labour shortages; mismatch; unemployment; Vacancies;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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