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The Beveridge Curve Across US States: New Insights From a Pairwise Approach
Author(s) -
Holmes Mark J.,
Otero Jesús
Publication year - 2020
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/obes.12337
Subject(s) - beveridge curve , pairwise comparison , economics , unemployment , matching (statistics) , great recession , unemployment rate , econometrics , recession , keynesian economics , macroeconomics , statistics , mathematics
This paper offers new insights into Beveridge curve analysis by modelling the unemployment–vacancy rate relationship at state‐level within a pairwise environment in which the unemployment rate in one state is inversely related to the vacancy rate in another. We find that Beveridge curve shifting, or matching efficiency, is driven by factors that include distance between states, the labour force participation rate, homeownership and the relative affordability of housing between states. A pairwise recursive analysis points to a decrease in matching efficiency in the period that followed the Great Recession.