How to Calculate the Job Finding Rate
The job finding rate equals hires divided by the number of unemployed searchers, and the vacancy filling rate equals those same hires divided by the number of open vacancies.
The Job Finding Rate formula
Calculator
Enter unemployed searchers, vacancies and hires to get the job finding rate, the filling rate and market tightness.
People without work who are actively looking. Anyone who stopped looking is outside the market.
Positions employers are recruiting for and would fill today.
Matches the two pools actually produced, which is m(U, V) in the matching function.
A given searcher has a 25% chance of being hired this month, which is what the matching function delivers to each side.
- Vacancy filling rate
- 37.5%
- Labor market tightness
- 0.67
- Expected months without work
- 4
- Which side is scarce
- Jobs, searchers outnumber vacancies
A given opening has a 37.5% chance of being filled this month, and the same hires drive both rates.
There are 0.67 vacancies per searcher, which is the standard measure of which side of the market is short.
Inverting the finding rate gives an average spell of 4 months, assuming a searcher faces the same rate every month.
Unfilled vacancies and unemployed searchers sit side by side whichever way tightness leans, because matching takes time.
How to calculate Job Finding Rate, step by step
- 1Count unemployed searchers (U). People without work who are actively looking, the same group the unemployment rate counts. Anyone who has stopped looking has left the market and does not belong here.
- 2Count open vacancies (V). Positions employers are recruiting for and would fill today, which is what a job openings survey measures.
- 3Count the hires the period produced. These are the matches the matching function turns out, written m(U, V). A hire needs a searcher and an opening, so neither pool sets the number on its own.
- 4Divide hires by each side of the market. Hires ÷ U is the job finding rate, the chance a given searcher is hired this period. Hires ÷ V is the vacancy filling rate, the chance a given opening gets filled.
- 5Read tightness and expected duration. Vacancies ÷ unemployed measures how tight the market is, and 1 ÷ the job finding rate gives the average number of periods a searcher waits before being hired.
Worked example: Job Finding Rate
A labor market holds 6 million unemployed searchers and 4 million open vacancies, and 1.5 million hires happen this month. The job finding rate = 1.5 ÷ 6 = 0.25, or 25% a month. The vacancy filling rate = 1.5 ÷ 4 = 0.375, or 37.5% a month. Tightness = 4 ÷ 6 = 0.67, below one, so searchers outnumber openings. Expected time without work = 1 ÷ 0.25 = 4 months. The result worth sitting with is that 4 million vacancies stand open beside 6 million searchers and only 1.5 million matches form, which is the whole point of the model: unemployment and unfilled jobs coexist because matching takes time. If matching worsens and hires fall to 1 million with the same two pools, the finding rate drops to 16.7% and the expected spell stretches to about 6 months, with no change in the number of jobs on offer.
Job Finding Rate questions
Why do vacancies and unemployment exist at the same time?
Because matching takes time. Searchers and openings differ in skill, location and timing, and neither side has full information, so a market can hold millions of each and still produce far fewer matches in a month. That leftover is frictional unemployment, and it survives even in a strong economy.
What does labor market tightness mean?
Tightness is vacancies divided by unemployed searchers. Above one, employers compete for scarce workers and wages get bid up. Below one, searchers compete for scarce openings and hiring standards rise. It is the standard one-number summary of which side of the market has the upper hand.
How long does the average unemployment spell last?
Invert the job finding rate. A 25% monthly finding rate gives an average spell of 1 ÷ 0.25 = 4 months, on the assumption that a searcher faces the same rate every month. Real spells last longer than that, because the finding rate tends to fall the longer someone has been out of work.
What is the Beveridge curve?
It plots vacancies against unemployment, tracing out how the two move together over the cycle. A shift outward means the same number of vacancies now sits alongside more unemployment, which says the matching process itself has gotten worse rather than that jobs have disappeared.
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