The Beveridge curve gives a negative relationship between market tightness and unemployment.
What is the economics of the Beveridge curve?
The Beveridge curve (UV curve) is a graphical representation of the relationship between the unemployment rate and the vacancy rate (the number of vacancies expressed as a percentage of the workforce). Normally, the vertical axis is the number of job openings and the horizontal axis is the unemployment rate.
Which factors would shift the Beveridge curve?
Other factors that could shift the Beveridge curve include changes in the long-term unemployment rate and changes in the employment rate. (In both cases, increasing amounts correspond to shifting to the right and vice versa.)
Why are Beveridge curves convex?
All curves are convex. As the number of job openings increases relative to the number of job seekers, companies find it harder to fill the vacancies with the right talent, leaving more vacancies unfilled.
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