Why can we claim that the separation rate was not the reason why the Beveridge curve shifted outwards during and after the Great Recession?

Expert Solution

In my opinion, the outward shift of Beveridge curve in this scenario is due to detoriation of human capital. The separation rate basically indicates the percentage of work force voluntarily and involuntarily leaving their organizations. During great recession, decreased job vacancies and increased unemployment caused the Beveridge curve to shift outwards and this indicates an inefficient labor force. Apart from this, economic uncertainty during the great recession pushed the employers to hold on to the vacancies before they could find the ideal candidates from a large pool to select. In simple, they didn't prefer hasty decisions to be taken and this issue further shifted the curve outwards even during the post recession period because longer the time employer involves in decision making, greater the people unemployed. Therefore, there is no explicit involvement of separation rate in this scenario.

Rahul Sunny answered 2 years ago

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