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A beveridge curve decomposition for Austria: What drives the unemployment rate?

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  • Christl, Michael

Abstract

The Austrian Beveridge curve shifted in 2014, leading to ongoing academic discussions about the reasons behind this shift. While some have argued that the shift was caused by a supply shock due to labour market liberalization, others have stated that matching efficiency decreased. Using a new decomposition method, combined with detailed labour market flow data, we are the first to disentangle supply-side, demand-side and matching factors, which could potentially cause a shift in the Beveridge curve in Austria. We find empirical evidence to confirm that the increase in the unemployment rate in Austria after 2011 can indeed be attributed to a supplyside shock. But, contrary to other research, our analysis shows that the shift in the Beveridge curve after 2014 was mainly caused by a decrease in matching efficiency, indicating a rising mismatch problem in the Austrian labour market.

Suggested Citation

  • Christl, Michael, 2019. "A beveridge curve decomposition for Austria: What drives the unemployment rate?," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203551, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc19:203551
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    References listed on IDEAS

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    1. 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.
    2. Boeri, Tito, 2011. "Institutional Reforms and Dualism in European Labor Markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 13, pages 1173-1236, Elsevier.
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    4. Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
    5. Abraham, Katharine G & Katz, Lawrence F, 1986. "Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 507-522, June.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Beveridge curve; crisis; mismatch; unemployment; structural unemployment; vacancies;
    All these keywords.

    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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