The Beveridge Curve in the OECD Before and After the Great Recession

This paper analyses the Beveridge curve across twelve OECD countries from 1985 to 2013. Besides allowing for some customary labour-market institutions, we assess the role of technological progress and globalisation, as well as of the current recession, on the curve. Significant institutional variables include unemployment benefits, the tax wedge, minimum wages, and, to a lesser extent, employment protection legislation (the latter improving the unemployment-vacancies trade-off). Technological progress has a complex impact. R&D intensity worsens matching efficiency, producing evidence in support of a creative destruction effect, while an index of total factor productivity has the opposite effect. Unlike in previous work, we find a favourable impact of globalisation. The curve parameters are stable throughout the 2008-2013 period, once we allow for country-specific shifts in the curve coincidental with the Great Recession. On the other hand, there is no common shift of the curve that can be associated with the Great Recession.