Beveridge Curve

The Beveridge Curve illustrates the relationship between the unemployment rate and the number of job vacancies in an economy. When many jobs are available but unemployment is high, it indicates a mismatch or inefficiency—workers may not have the skills employers need. Conversely, low unemployment with many vacancies suggests a healthy, balanced job market. Movements along or shifts of the curve reflect changes in how effectively the labor market matches workers with jobs. Economists use this curve to analyze labor market health and to identify issues like skill gaps or recession impacts.