Search, Unemployment, and the Beveridge Curve: Experimental Evidence

40 Pages Posted: 4 Jan 2023

See all articles by John Duffy

John Duffy

University of California, Irvine

Brian C. Jenkins

University of California Irvine - Department of Economics

Date Written: December 30, 2022

Abstract

We report on a laboratory experiment testing the predictions of the Diamond-Mortensen-Pissarides (DMP) search-and-matching model, which is a workhorse, decentralized model of unemployment and the labor market. We focus on the job vacancy posting problem that firms face in the DMP model. We explore comparative statics predictions concerning variations in the separation rate, the vacancy posting cost, and the firm's surplus earned per employee. Across all treatments, we find strong evidence for an inverse relationship between vacancies and unemployment, consistent with the Beveridge curve. We also find that the results of our various comparative statics exercises are in-line with the predictions of the theory.

Keywords: Unemployment, Beveridge curve, job search, matching, experimental economics

JEL Classification: J64, C92

Suggested Citation

Duffy, John and Jenkins, Brian C., Search, Unemployment, and the Beveridge Curve: Experimental Evidence (December 30, 2022). Available at SSRN: https://ssrn.com/abstract=4315396 or http://dx.doi.org/10.2139/ssrn.4315396

John Duffy (Contact Author)

University of California, Irvine ( email )

Department of Economics
3151 Social Science Plaza
Irvine, CA 92697
United States
949-824-8341 (Phone)

Brian C. Jenkins

University of California Irvine - Department of Economics ( email )

3151 Social Science Plaza A, University of Califor
Irvine, CA 92617
United States

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