In an article on Thursday’s front page, I wrote about how long job vacancies are taking to fill, especially when you consider the abundance of unemployed workers.
Economists have been thinking about this issue for a couple of years now thanks to a shift in what is known as the Beveridge Curve.
No, the Beveridge Curve is not about the relationship between Coke and Pepsi. It’s named for the British economist William Henry Beveridge, and it shows the relationship between the unemployment rate and the job vacancy rate.
In an economic expansion, the jobless rate is low and the job vacancy rate is high; a small share of workers are looking for jobs, and so when employers post a vacancy, the opening can be hard to fill. Or you can think about it the other way — if there are a lot of jobs available, then people will not have much trouble finding work, leading to low unemployment.
Chosen excerpts by Job Market Monitor
When trying to determine if high unemployment is being caused by weak demand or by a mismatch between jobs and the skills of job seekers, economists look at the Beveridge Curve. It represents the relationship between the unemployment rate and the job vacancy rate. On a simple chart, vacancies are on the vertical axis and unemployment … Continue reading »
The Report of the Inter-Departmental Committee on Social Insurance and Allied Services, known commonly as the Beveridge Report was an influential document in the founding of the Welfare Statein the United Kingdom. It was chaired by William Beveridge, an economist, who identified five “Giant Evils” in society: squalor, ignorance, want, idleness and disease, and went on to propose widespread reform to the … Continue reading »
The rate of short-term unemployment—six months or less—is almost back to normal. In January it was 4.9 percent of the labor force. That’s only 0.7 percentage point above its 2001-07 average. But the rate of long-term unemployment, 3 percent in January, is precisely triple its 2001-07 average, according to a Bloomberg Businessweek calculation based on Bureau of Labor … Continue reading »
US unemployment seems stuck at an unusually high level of 8%, prompting some to suggest a widespread skills mismatch. This column argues that a skills mismatch is not supported by the evidence. Rather, out of the possible explanations, it seems that any shift in the ratio between unemployment and vacancies is driven by either lower … Continue reading »
Since the onset of the Great Recession, there has been a change in the relationship between the unemployment rate and vacancy rate in the U.S.” write Bart Hobijn and Aysegul Sahin in Beveridge Curve Shifts across Countries since the Great Recession on frbsf.org. (Choosen excerpts by JMM to follow) This relationship, summarized by the Beveridgecurve, was remarkably … Continue reading»
Mismatch across industries and occupations explains at most one-third of the total observed increase in the unemployment rate reveals a study by the Federal Reserve Bank of New York Study
“We develop a framework where mismatch between vacancies and job seekers across sectors translates into higher unemployment by lowering the aggregate job-finding rate” write Aysegul Sahin, Joseph Song, Giorgio Topa, and Giovanni L. Violante in Mismatch Unemployment on newyorkfed.org. How much did mismatch contribute to the dynamics of U.S. unemployment around the Great Recession? To address this question, we … Continue reading »
Bernanke : While I do not see much evidence of any significant increase in structural unemployment so far, I am concerned that structural unemployment could increase over time if the labor market heals too slowly–a phenomenon known as hysteresis. I do not interpret data suggesting an outward shift in the Beveridge curve as providing much evidence … Continue reading »