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Decomposing Beveridge curve dynamics by correlated unobserved components

  • Klinger, Sabine

    ()

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Weber, Enzo

    ()

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

"Between 1979 and 2009, the German labour market moved along a Beveridge curve with changing slope that usually shifted outwards but once inwards. We employ an unobserved components model to simultaneously disentangle permanent and transitory components of matching efficiency and separation rate (shifting parameters) as well as unemployment and vacancies. Cointegration and identification are especially addressed. We find a steady overlay of structural and transitory shocks for both shifts of and movements along the curve. Thereby, the separation rate is more important than matching efficiency and the two are negatively correlated. Labour market tightness is mostly driven by stochastic trends, which leads to permanent rotations of the job creation curve, i. e. movements along the Beveridge curve." (Author's abstract, IAB-Doku) ((en))

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Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 201228.

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Length: 33 pages
Date of creation: 05 Dec 2012
Date of revision:
Publication status: published als: Regensburger Diskussionsbeiträge zur Wirtschaftswissenschaft : 480 (University of Regensburg working papers in business, economics and management information systems : 480)
Handle: RePEc:iab:iabdpa:201228
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