The Dual Beveridge Curve

Anton Cheremukhin and Paulina Restrepo-Echavarria

No 2022-021, Working Papers from Federal Reserve Bank of St. Louis

Abstract: The recent behavior of the U.S. Beveridge curve — its outward shift and changing slope — has puzzled economists and is difficult to reconcile with standard explanations based on gradual structural change or declining matching efficiency. We propose a dual-vacancy model in which firms post two distinct types of vacancies: those targeting unemployed workers and those designed to hire already employed workers through poaching. These two types of vacancies operate in segmented sub-markets with separate matching processes. Using U.S. labor market data from 1978 to 2024, we estimate the evolution of both types of vacancies, and show that the share of poaching vacancies has risen significantly since the mid-2010s. This increase is closely linked to an upward trend in their estimated profit-cost ratio. When we adjust the Beveridge curve to include only non-poaching vacancies, its recent puzzling behavior disappears. We estimate the model using a flexible Bayesian framework across multiple data constructions and sectors, and find consistent evidence supporting the dual-vacancy mechanism.

Keywords: Beveridge curve; vacancies; unemployment (search for similar items in EconPapers)
JEL-codes: E52 J23 J63 J64 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2022-09-06, Revised 2025-05-07
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Working Paper: The Dual Beveridge Curve (2024)
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DOI: 10.20955/wp.2022.021

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