Declining Labor Turnover and Turbulence

Shigeru Fujita

No 18-6, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: (supersedes WP 15-29)The rate of job loss has been on a secular decline for the last four decades or longer. Changes in demographics or industry composition do not account for the trend. This paper seeks to identify possible sources of this decline using a simple labor matching model with two types of workers, experienced and inexperienced, where the former type faces a risk of skill loss during unemployment. When the skill loss occurs, the worker is required to restart his career and thus suffers a drop in his wage. I show that a higher risk of skill loss results in a lower job separation rate, because workers are willing to accept lower wages in exchange for keeping their jobs. Various other potential hypotheses are also examined in the model.

Keywords: job loss rate; search and matching; turbulence (search for similar items in EconPapers)
JEL-codes: E24 E32 J64 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2018-02-02
Note: supersedes WP 15-29
References: Add references at CitEc
Citations: View citations in EconPapers (29)

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Related works:
Journal Article: Declining labor turnover and turbulence (2018)
Working Paper: Declining labor turnover and turbulence (2015)
Working Paper: Declining labor turnover and turbulence (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:18-6

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DOI: 10.21799/frbp.wp.2018.06

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