Shifts in Euro Area Beveridge Curves and Their Determinants

35 Pages Posted: 11 Feb 2015

See all articles by Boele Bonthuis

Boele Bonthuis

University of Amsterdam; Deutsche Bundesbank

Valerie Jarvis

European Central Bank (ECB)

Juuso Vanhala

Bank of Finland

Date Written: February 3, 2015

Abstract

​This paper analyses euro area Beveridge curves at the euro area aggregate and country level over the past 25 years. Using an autoregressive distributed lag model we find a significant outward shift in the euro area Beveridge curve since the onset of the crisis, but considerable heterogeneity at country level. We test for factors underlying these developments using the local projections method of Jordà (2005). Skill mismatch, high shares of workers in the construction sector, as well as high pre-crisis financial slack and home ownership rates appear strong determinants of outward shifts in Beveridge curves in response to a negative shock. Higher female participation rates mitigate these effects.

Keywords: Beveridge curve, crisis, mismatch, unemployment, labour shortages, vacancies

JEL Classification: J62, J63, E24, E32

Suggested Citation

Bonthuis, Boele and Jarvis, Valerie and Vanhala, Juuso, Shifts in Euro Area Beveridge Curves and Their Determinants (February 3, 2015). Bank of Finland Research Discussion Paper No. 2/2015. Available at SSRN: https://ssrn.com/abstract=2560163 or http://dx.doi.org/10.2139/ssrn.2560163

Boele Bonthuis

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Valerie Jarvis

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Juuso Vanhala (Contact Author)

Bank of Finland ( email )

P.O. Box 160
Helsinki 00101
Finland

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