Declining Worker Turnover: The Role of Short Duration Employment Spells
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Michael J. Pries
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Richard Rogerson
- American Economic Journal: Macroeconomics (Forthcoming)
Abstract
Using the Quarterly Workforce Indicators database, we document that a significant
amount of the decline in labor market turnover during the last two decades is accounted
for by the decline in employment spells that last less just one or two quarters. This
phenomenon is pervasive: short-term employment spells have declined across industries,
firm-size categories, demographic groups, and geographic regions. Using a search and
matching model in the Diamond-Mortensen-Pissarides tradition that incorporates noisy
signals about the quality of a worker-firm match, we argue that improved screening by
workers and firms can account for much of the decline in short-lived employment spells.
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