The Quit Rate as a Measure of Job and Pay Comparability,
Abstract
The Federal government tries to keep compensation of Ifs civilian employees competitive with compensation in the private sector by setting wages to be comparable to wages in the private sector. Reliance on wages to measure the comparability of compensation may be inferior to reliance on other measures that incorporate pecuniary and non-pecuniary factors not measured by wages alone. Theory suggests that the quit rate could be used to indicate when compensation is getting out of proper adjustment: a rise in the quit rate would indicate that total compensation is falling in comparison with compensation offered by other employers. To judge whether the quit rate is a sensitive measure of compensation comparability, the relation of quits and relative wages in manufacturing industries was examined. Two different data sets were used to test the same general model. Both tests showed that quits rise when relative wages fall, and vice-versa. In one test, using aggregate time series data for each of twenty-six manufacturing industries, all but two industries showed this negative relationship, and the results were statistically significant in twelve of the twenty-six. The conclusion is that the quit rate is a sensitive measure of wage comparability. If it is to be used as a basis for adjusting federal wages, however, more must be known about hiring costs and about how quits in federal employment should be measured.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 01, 1979
- Accession Number
- ADA074506
Entities
People
- Frank Brechling
- Louis Jacobson