Beveridge Curve Shifts May Not Reflect Labor Market Problems

The Beveridge curve shows the relationship between unemployment and job vacancies. It shifted outwards during COVID, signaling an inefficient labor market.

The curve may have shifted because of a "willingness mismatch" - people less willing to work during COVID.

But the standard Beveridge curve implies unemployed people fill vacancies. In reality, most vacancies are filled by job switchers.

A revised Beveridge curve that accounts for job switchers is more stable over time. This suggests the economy does a decent job matching workers to jobs.

The supposed skills mismatch in America may be overblown. Workers can be quickly trained for new jobs, like an eyelash technician becoming a phlebotomist.