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The Dual Beveridge Curve

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Abstract

This study introduces a dual vacancy model to explain the recent anomalous behavior of the Beveridge curve. The model proposes that job vacancies are partitioned into two categories, one for the unemployed and the other for job-to-job transitions, and that they function in separate markets. We estimate the monthly numbers of both job vacancy types for the U.S. economy and its subsectors starting from 2000 and find a significant surge in poaching vacancies in the mid-2010s. Our analysis indicates that the dual vacancy model provides a better fit to the data than traditional models. These findings suggest that a deceleration in worker demand can have a reduced impact on unemployment, with implications for monetary policy.

Suggested Citation

  • Anton A. Cheremukhin & Paulina Restrepo-Echavarria, 2022. "The Dual Beveridge Curve," Working Papers 2022-021, Federal Reserve Bank of St. Louis, revised 13 Sep 2023.
    • Handle: RePEc:fip:fedlwp:94749
    DOI: 10.20955/wp.2022.021
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    1. 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.
    2. Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2013. "The Establishment-Level Behavior of Vacancies and Hiring," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 581-622.
    3. Hie Joo Ahn & Leland D. Crane, 2020. "Dynamic Beveridge Curve Accounting," Papers 2003.00033, arXiv.org.
    4. Michael W. L. Elsby & Ryan Michaels & David Ratner, 2015. "The Beveridge Curve: A Survey," Journal of Economic Literature, American Economic Association, vol. 53(3), pages 571-630, September.
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    More about this item

    Keywords

    Beveridge curve; vacancies; unemployment;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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