Sliding Out on the Beveridge Curve, May 2011 Edition

The Job Opening and Labor Turnover Survey (JOLTS) monthly data was just released.  These numbers are on an additional lag, so these numbers released today are for the month of May.

Job openings remained flat, as they have since mid 2010:

As I noted in a research brief, this number had been revised downward earlier this year by a significant amount, radically overstating the level of evidence for elite concerns about structural unemployment and the need to pivot to the deficit.

How does the Beveridge Curve look?  Job Opening Rate stays the say, unemployment increases:

One of the biggest worries in 2010 was that this graph would head upward, as job openings came but the unemployed couldn’t successfully get those jobs.  As we see here though, the level of jobs remain at a low level, and our economy is mostly sputtering around.

One way we would know if we had hit the structural limits of what can be done by the government in the economy is if these graph were indeed spiking upward, with lots of job openings but also a lot of unemployed people who could not take them, for whatever structural reasons.   Instead we have a depressed level of job openings, with the curve bouncing around based on how the unemployment number is evolving, indicating there is a lot more that can be done.

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3 Responses to Sliding Out on the Beveridge Curve, May 2011 Edition

  1. Pingback: Empirical Support | Toxic Assets

  2. Misaki says:

    This may depend somewhat on your definition of structural unemployment. If unemployment is defined in terms of the reason for people losing their jobs, “structural” should indeed be seen as part of the reason for the high unemployment rate existing currently, along with the lower amount of money possessed by the poor and middle class which spend their money faster than the rich which might have resulted in part from the drop in home asset values as one of the main sources of investments possessed by the poor and middle class (along with savings… can’t remember where the helpful chart was showing investments by type and income quintile/third).

    Previously it might have been assumed that when people lost their jobs due to technology improvement or shifts in relative wealth or purchasing decisions, that this excess supply of labour would easily be absorbed by existing industries and only if there was significant demand for an emerging product type would this show up as “structural unemployment” with high job vacancies combined with high unemployment. But this might just be a matter of definitions.

  3. David Wiczer says:

    @Misaki:
    Usually, when we talk about business cycle- frequency fluctuations in the unemployment rate, the focus is on what affects the finding rate, rather than the separation rate. Accordingly, “structural” unemployment research is centered on why someone might not be able to find a job because of a structural change but generally not that one might loose a job because of a structural change.
    This seems to be mostly a good protocol: because when we decompose the high-frequency contributions to unemployment, ~2/3-3/4 come to slowing finding rates in recession rather than accelerating separation rates. Basically, separation rates stay relatively constant, whatever the cause and this has been the case in this recession too.

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