Job vacancy relation with labour inputs and unemployment: preliminary evidence from economic sectors

Abstract

Job vacancy statistics (JVS) are key leading indicators of the business cycle and are essential for structural labour market analysis, particularly in identifying mismatches between labour demand and supply. Despite their importance, Italy has yet to fully exploit demand-side data or evaluate the predictive capacity of JVS for employment and unemployment trends. This paper investigates whether changes in job vacancy rates can serve as leading indicators of economic activity by analysing their relationship with various labour input indicators, including occupied positions, hours worked, and jobs filled by temporary agency workers. The analysis uses quarterly time series and growth rate comparisons from 2016 to 2024, based on data from three official Istat sources: Employment, Wages, Salaries, and Social Contributions; Job Vacancies and Hours Worked; and Labour Force. A central component is the construction of Italy’s Beveridge curve to explore the dynamics between labour demand and supply. Results indicate that, overall, the vacancy rate leads labour input growth by one quarter, though some sectors show contemporaneous relationships. The findings also reveal both cyclical and structural shifts in the vacancy-unemployment relationship, laying the groundwork for future modelling of job matching dynamics.