The Shifting Reasons for Beveridge-Curve Shifts

Gadi Barlevy, Jason Faberman (), Bart Hobijn and Aysegul Sahin

No 31783, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We discuss how the relative importance of factors that contribute to movements of the U.S. Beveridge curve has changed from 1960 to 2023. We review these factors in the context of a simple flow analogy used to capture the main insights of search and matching theories of the labor market. Changes in inflow rates, related to demographics, accounted for Beveridge curve shifts between 1960 and 2000. A reduction in matching efficiency, that depressed unemployment outflows, shifted the curve outwards in the wake of the Great Recession. In contrast, the most recent shifts in the Beveridge curve appear driven by changes in the eagerness of workers to switch jobs. We argue that, while the Beveridge curve is a useful tool for relating unemployment and vacancies to inflation, the link between these labor market indicators and inflation depends on whether and why the Beveridge curve shifted. Therefore, a careful examination of the factors underlying movements in the Beveridge curve is essential for drawing policy conclusions from the joint behavior of unemployment and job openings.

JEL-codes: E52 J20 J6 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-lab
Note: EFG ME
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Citations: View citations in EconPapers (4)

Published as Gadi Barlevy & R. Jason Faberman & Bart Hobijn & Ayşegül Şahin, 2024. "The Shifting Reasons for Beveridge Curve Shifts," Journal of Economic Perspectives, vol 38(2), pages 83-106.

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Journal Article: The Shifting Reasons for Beveridge Curve Shifts (2024)
Working Paper: The Shifting Reasons for Beveridge-Curve Shifts (2023)
Working Paper: The Shifting Reasons for Beveridge-Curve Shifts (2023)
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