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Shifting the Beveridge Curve: What Affects Labor Market Matching?

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  • Ms. Elva Bova
  • João Tovar Jalles
  • Ms. Christina Kolerus

Abstract

This paper explores conditions and policies that could affect the matching between labor demand and supply. We identify shifts in the Beveridge curves for 12 OECD countries between 2000Q1 and 2013Q4 using three complementary methodologies and analyze the short-run determinants of these shifts by means of limited-dependent variable models. We find that labor force growth as well as employment protection legislation reduce the likelihood of an outward shift in the Beveridge curve,. Our findings also show that the matching process is more difficult the higher the share of employees with intermediate levels of education in the labor force and when long-term unemployment is more pronounced. Policies which could facilitate labor market matching include active labor market policies, such as incentives for start-up and job sharing programs. Passive labor market policies, such as unemployment benefits, as well as labor taxation render matching signficantly more difficult.

Suggested Citation

  • Ms. Elva Bova & João Tovar Jalles & Ms. Christina Kolerus, 2016. "Shifting the Beveridge Curve: What Affects Labor Market Matching?," IMF Working Papers 2016/093, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2016/093
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    2. Bhuller, Manudeep & Kostøl, Andreas & Vigtel, Trond Christian, 2019. "How Broadband Internet Affects Labor Market Matching," Memorandum 10/2019, Oslo University, Department of Economics.
    3. Hutter, Christian & Klinger, Sabine & Trenkler, Carsten & Weber, Enzo, 2019. "Which factors are behind Germany's labour market upswing?," IAB-Discussion Paper 201920, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Sergio Destefanis & Matteo Fragetta & Nazzareno Ruggiero, 2023. "Active and passive labour-market policies: the outlook from the Beveridge curve," Applied Economics, Taylor & Francis Journals, vol. 55(55), pages 6538-6550, November.
    5. Miyamoto Hiroaki & Suphaphiphat Nujin, 2021. "Mitigating Long-term Unemployment in Europe," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-27, May.
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    7. Christian Hutter & Francesco Carbonero & Sabine Klinger & Carsten Trenkler & Enzo Weber, 2022. "Which factors were behind Germany's labour market upswing? A data‐driven approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(5), pages 1052-1076, October.
    8. Gökten, Meryem & Heimberger, Philipp & Lichtenberger, Andreas, 2024. "How far from full employment? The European unemployment problem revisited," European Economic Review, Elsevier, vol. 164(C).
    9. Jalles, João Tovar, 2017. "On the rationality and efficiency of inflation forecasts: Evidence from advanced and emerging market economies," Research in International Business and Finance, Elsevier, vol. 40(C), pages 175-189.
    10. Lee, King Fuei, 2023. "Is Singapore’s Beveridge Curve Suffering From Long Covid Shifts?," MPRA Paper 117841, University Library of Munich, Germany.
    11. 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.
    12. Andrew Weaver, 2022. "Who Has Trouble Hiring? Evidence from a National IT Survey," ILR Review, Cornell University, ILR School, vol. 75(3), pages 608-637, May.
    13. repec:hal:spmain:info:hdl:2441/3ii0pf6a4b8o4ovgol0f0kd8f3 is not listed on IDEAS
    14. Hannah Sheldon, 2020. "The Beveridge curve and equilibrium unemployment," Economics Bulletin, AccessEcon, vol. 40(4), pages 3182-3192.
    15. Finn Robinson, 2020. "Vacancies, unemployment and labour market slack in New Zealand," Reserve Bank of New Zealand Analytical Notes series AN2020/07, Reserve Bank of New Zealand.

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