Mexico's Labor Market through the Lens of the Beveridge Curve

Luis Fernando Colunga, Miroslava Quiroga-Trevino, Irina Panovska, Prajyna Barua and B. Elam Rodríguez-Alcaraz

No 2026-07, Working Papers from Banco de México

Abstract: This paper constructs the first Beveridge Curves for Mexico and its regions using a newly compiled dataset on formal-sector job vacancies. A new measure of labor market slack for Mexico, based on the vacancies to unemployment (V/U) ratio, is introduced and used to explore national and regional Phillips Curves. Incorporating this novel vacancy dataset also makes it possible to identify structural macroeconomic shocks and analyze business cycle dynamics at both the national and regional levels through the estimation of a Structural Bayesian VAR model. The results show that unemployment dynamics are mainly driven by labor supply and matching efficiency shocks, while wage bargaining shocks explain most of the variation in vacancies at the national level, with notable heterogeneity across regions.

Keywords: Beveridge Curve; Phillips Curve; Labor; SVAR; Vacancies; Unemployment; V/U ratio. (search for similar items in EconPapers)
JEL-codes: E24 J01 J23 J64 (search for similar items in EconPapers)
Date: 2026-10
New Economics Papers: this item is included in nep-lma
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