The labour market matching in Macedonia: An analysis based on the shifting Beveridge curve

Nikoloski, Dimitar and Angeleski, Marjan and Rocheska, Slavica (2017) The labour market matching in Macedonia: An analysis based on the shifting Beveridge curve. In: ICEI Economy of Integration, December 7-9, 2017, Tuzla.

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The matching process between the labour supply and demand represents an important characteristic of the labour market efficiency. From a macroeconomic perspective, the relationship between the unemployment rate and job vacancy rate is represented by the Beveridge curve as an indicator of how well workers are matching with job vacancies in the economy. Although the theory assumes a negative slope of the Beveridge curve, in practice one can find different kinds of shapes. Beveridge curve dynamics can be distinguished between movements on the curve and shifts of the curve. In general, movements on the curve reflect cyclical changes, while movements of the curve are associated with changes in frictional unemployment i.e. improvement or deteriorations in labour market matching. During the previous period of transition Macedonia has been affected by persistent unemployment that caused substantial human capital depreciation on the supply side. In addition, we have witnessed significant sectoral shifts on the demand side manifested by increased share of employment in the service sector. Although the recent labour market development shows signals of slight improvement in the matching process, many employers still face difficulties to hire workers with required skills. The problem of mismatch between labour supply and demand in Macedonia has been widely recognised, but up to the present it has not been explored by using the Beveridge curve. The aim of this paper is to explore the dynamics in the matching process in Macedonia by econometrically assessing the shifts of the Beveridge curve. For this purpose we use a quarterly time series data for the job vacancy rate and unemployment rate. The results might be used for designing appropriate policy recommendations that can be undertaken in order to improve the outcomes of the Macedonian labour market.

Item Type: Conference or Workshop Item (Paper)
Subjects: Scientific Fields (Frascati) > Social Sciences > Economics and Business
Divisions: Faculty of Economics
Depositing User: Mr Dimitar Risteski
Date Deposited: 08 Dec 2019 20:33
Last Modified: 08 Dec 2019 20:33

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