Job matching: evidence from the Beveridge curve

This Economic Letter examines the evidence on long-term shifts in the speed and efficiency of job matching in U.S. labor markets by using the so-called Beveridge curve. The Beveridge curve is an empirical measure of the relationship between the job vacancy rate and the unemployment rate. Changes in the job-matching process suggested by movements in the Beveridge curve, and their implications for U.S. labor market performance, have not been extensively analyzed, due in part to the absence of consistent data on job vacancies over a long time period. In this Economic Letter, we utilize new data from the U.S. Bureau of Labor Statistics (BLS) to construct a long-term vacancy series and corresponding estimates of the Beveridge curve. We find that declining dispersion of economic growth across geographic regions helps explain improvements in the job-matching process since the mid-1980s and reinforces existing depictions of improved performance of the U.S. aggregate labor market in the 1990s (for example, Katz and Krueger 1999).