Working Paper: NBER ID: w1419
Authors: Edward P. Lazear
Abstract: Job changes often occur without spells of unemployment. Highly educated workers, for example, rarely suffer unemployment, even though job changes are common. A large proportion of their job switches occur only after the new job is secured. These workers, whose skills and ability levels are less homogeneous, differ from less skilled, perhaps more homogeneous workers who are more likely to experience unemployment in the process of changing jobs. Most research has focused on job changes that imply spells of unemployment. Indeed, the primary rationale behind the earliest papers on search theory was to explain unemployment. But if there exists what some refer to as a "dual labor market," these theories may be most applicable to the secondary workers. This paper attempts to formulate a theory of turnover and wage dynamics that may better describe the primary labor force, defined as those who change jobs without unemployment. In the process, a number of previously unexamined phenomena are explored.
Keywords: Job Turnover; Wage Dynamics; Labor Market; Stigma; Worker Quality
JEL Codes: J31; J63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| worker quality (J81) | likelihood of receiving outside offers (L24) |
| likelihood of receiving outside offers (L24) | wages of workers (J31) |
| stigma (J70) | wage dynamics (J31) |
| equilibrium level of turnover (J63) | wage difference within an occupation (J31) |
| turnover (J63) | wages converge towards marginal productivity (J31) |
| job search during unworked time (J64) | lower wages (J31) |
| visibility of occupations (J69) | probability of turnover (J63) |
| visibility of occupations (J69) | wage dynamics (J31) |
| historical employment status (J63) | likelihood of being raided (K42) |