Working Paper: CEPR ID: DP6236
Authors: Eran Yashiv
Abstract: The Beveridge curve depicts a negative relationship between unemployed workers and job vacancies, a robust finding across countries. The position of the economy on the curve gives an idea as to the state of the labour market. The modern underlying theory is the search and matching model, with workers and firms engaging in costly search leading to random matching. The Beveridge curve depicts the steady state of the model, whereby inflows into unemployment are equal to the outflows from it, generated by matching.
Keywords: Beveridge curve; matching; search; unemployment; vacancies
JEL Codes: E24; J63; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| number of unemployed workers (u) (J64) | job vacancies (v) (J63) |
| job vacancies (v) (J63) | number of unemployed workers (u) (J64) |
| job vacancies (v) (J63) | matching flow (m) (C78) |
| matching flow (m) (C78) | job finding rate (p) (J68) |
| job finding rate (p) (J68) | number of unemployed workers (u) (J64) |