econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 07 September 2015

Should I Stay Or Should I Go Now?

from the Atlanta Fed

-- this post authored by John Robertson

A recent article by Jason Faberman and Alejandro Justiniano at the Chicago Fed shows that there is a strong relationship between quit rates - as a proxy for the pace of job switching - and wage growth. Movements in the quit rate and wage growth are both procyclical. A tighter (weaker) labor market implies workers are more (less) likely to find better employment matches, and employers are more (less) willing to offer higher wages to attract new workers and retain existing workers.

To get some idea of the different wage outcomes of job switching versus job staying, we can use microdata underlying the Atlanta Fed's Wage Growth Tracker from the Current Population Survey. The following chart plots the quarterly private-sector quit rate (orange line) from the Job Openings and Labor Turnover Survey using Davis, Faberman, and Haltiwanger (published in 2012 in the Journal of Monetary Economics) estimates before 2001. Also shown is the median year-over-year wage growth of private-sector wage and salary earners who switched jobs (blue line) or stayed in the same job (green line). Job stayers are approximated by the restriction that they are in the same broad industry and occupation as 12 months earlier and have been with the same employer for each of the last four months. Job switchers do not satisfy these restrictions but were employed in the current month and 12 months earlier.

Private Sector Quit Rate and Wage Growth

The correlation between the quit rate and median wage growth is strongly positive and is slightly higher for job switchers (0.91) than for job stayers (0.88). In most periods, the median wage growth of job switchers is higher than for job stayers. This difference is consistent with the notion that job switching tends to involve moving to a better-paying job. However, during periods when the quit rate is slowing, median wage growth slows for both job stayers and switchers (reflecting the correlation between quits and wages), and the wage-growth premium from job switching tends to vanish.

Since the end of the last recession, the quit rate has been rising and a wage-growth premium for job switching has emerged again. Interestingly, during the last year, the wage growth of job stayers appears to have strengthened as well, consistent with a general tightening of the labor market.

Source

http://macroblog.typepad.com/macroblog/2015/09/should-i-stay-or-should-i-go-now.html

About the Author

Photo of John RobertsonJohn Robertson, senior policy adviser in the Atlanta Fed's research department

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
China, Russia, and the United States: Are They Superpowers?
A New Era of Central Banking?
News Blog
Lost In The Sixties-The Winds Of Change
January 2017 CFNAI Super Index Moving Average Statistically Unchanged
18 February 2017 Initial Unemployment Claims Rolling Average Insignificantly Improves
Jihadism: An Eerily Familiar Threat
Dynamic Stochastic General Equilibrium Forecast For February 2017
Infographic Of The Day: Guide To Tipping
Early Headlines: Asia Stocks Mostly Down, Oil Up, Dollar And Gold Steady, Extreme Arctic Warmth, Town Halls, More Water In Calif, UK Bogus Green Power, Mosul Airport Attacked And More
Documentary Of The Week: The History Of Humanity
Animals Know When They Are Being Treated Unfairly And They Don't Like It
What Americans Associate Most With Super Bowl Ads
Ranking The US's Presidents Isn't Just A Game For Americans
Canada's Best Employers 2017
What We Read Today 22 February 2017
Investing Blog
Green Is Still A Go
How Snapchat Compares To Facebook And Twitter Pre-IPO
Opinion Blog
Kenneth Arrow's Ignored Impossibility Theorem
The Blame Game
Precious Metals Blog
Deflation And Gold: A Contrarian View
Live Markets
23Feb2017 Market Update: Wall Street Records New Highs And Then Looses Steam As Unemployment Rises, Several Analysts Are Warning About A Possible Market Plunge
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved