An Alternative Explanation of the Cyclical Pattern of Quits.
Abstract
Time series studies uniformly have found that aggregate quit rates in manufacturing industries are strongly related to business conditions. Quits are high during periods of low unemployment and vice-versa. The model of economic behavior most often used to explain these results is one of individual utility (or income) maximization; workers are assumed to quit jobs in response to changes in the expected value of job search. Implicit in these studies is the idea that changes in aggregate quit rates over the business cycle are caused by changes in the probability that individuals will quit. This paper presents evidence that, at least for the steel industry, a change in the probability that individuals will quit is not the major reason why aggregate quit rates are cyclically sensitive. The alternative explanation tested in this study is that changing quit rates is an aggregation phenomenon traceable to changes in the tenure distributrion of the employed work force.
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 01, 1978
- Accession Number
- ADA068200
Entities
People
- Louis Jacobson