Shifting the Beveridge Curve: What Affects Labor Market Matching?

By Elva Bova, João Tovar Jalles, Christina Kolerus

April 12, 2016

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Format: Chicago

Elva Bova, João Tovar Jalles, and Christina Kolerus. Shifting the Beveridge Curve: What Affects Labor Market Matching?, (USA: International Monetary Fund, 2016) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Active labor market policies, Frictional unemployment, Labor, Labor force, Labor markets, Unemployment

Keywords: Active labor market policies, Average earnings, Breaks, Cointegration, Employment protection legislation, Financial crisis, Frictional unemployment, Global, Job sharing, Labor force, Labor market characteristic, Labor market matching, Labor markets, Long-term unemployment, Output gap, Probit, Unemployment, Vacancies, WP

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/093
Stock No:

WPIEA2016093
ISBN:

9781484326466
ISSN:

1018-5941

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