The Beveridge Curve in the OECD. Before and after the Great Recession

Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 5

28 Pages Posted: 19 Jan 2017

See all articles by Sergio Destefanis

Sergio Destefanis

University of Salerno

Giuseppe Mastromatteo

Catholic University of the Sacred Heart of Milan

Date Written: December 27, 2016

Abstract

This paper analyses the Beveridge Curve across nine OECD countries from 1985 to 2012. Besides allowing for some customary labour-market institutions, we assess the role of various kinds of structural factors (technological progress, globalisation, oil prices) and of the current recession on the Curve. Significant institutional variables include unemployment benefits, the tax wedge, active labour-market policies and employment protection legislation (the latter improving the unemployment-vacancies trade-off). Technological progress (R&D intensity) shifts the Curve outwards, producing evidence in support of a creative destruction effect. Globalisation and unfavourable oil price shocks also shift the Curve outwards. Structural relationships seem to be stable throughout the 2008-2012 period, suggesting that the Great Recession mainly implied moves along the Curve.

Keywords: Unemployment, vacancies, globalisation, creative destruction, labour-market policies

JEL Classification: E24, J20, F60, O40

Suggested Citation

Destefanis, Sergio and Mastromatteo, Giuseppe, The Beveridge Curve in the OECD. Before and after the Great Recession (December 27, 2016). Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 5, Available at SSRN: https://ssrn.com/abstract=2900314

Sergio Destefanis (Contact Author)

University of Salerno ( email )

Via Giovanni Paolo II, 132
Fisciano, Salerno 84084
Italy

Giuseppe Mastromatteo

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

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