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Repeated Job Quits: Stepping stones or learning about quality?

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  • Gielen Anne C.

    (ROA rm)

Abstract

Despite the fact that worker quits are often associated with wage gains and higheroverall job satisfaction, many workers quit once again within one or two years afterchanging jobs initially. Such repeated job quit behavior may arise as a steppingstone to better quality jobs (Burdett, 1978) or as a response to unexpectedly lowjob quality (Jovanovic, 1979).This paper tests the validity of both explanations using data from the UK labormarket in order to improve our understanding of job search behavior. Results frompanel estimations of job quits and job satisfaction illustrate that the labor market ischaracterized by elements of both explanations. More specifically, a variancedecomposition shows that the stepping stone model explains 80 percent ofrepeated job quit behavior; the remaining 20 percent is the result of learning aboutjob quality. Hence, workers appear to need several job quits to find their mostpreferred job and multiple job quits serve as a stepping stone to more satisfaction atwork.

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Paper provided by Maastricht University, Research Centre for Education and the Labour Market (ROA) in its series ROA Research Memorandum with number 010.

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Date of creation: 2008
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Handle: RePEc:unm:umaror:2008010

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Keywords: education; training and the labour market;

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  1. George A. Akerlof & Andrew K. Rose & Janet L. Yellen, 1988. "Job Switching and Job Satisfaction in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 495-594.
  2. Ronni Pavan, 2010. "The Role of Career Choice in Understanding Job Mobility," LABOUR, CEIS, vol. 24(2), pages 107-127, 06.
  3. Joseph Altonji & Christina Paxson, 1985. "Job Characteristics and Hours of Work," Working Papers 578, Princeton University, Department of Economics, Industrial Relations Section..
  4. Audrey Light & Kathleen McGarry, 1998. "Job Change Patterns And The Wages Of Young Men," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 276-286, May.
  5. Louis Lévy-Garboua & Claude Montmarquette & Véronique Simonnet, 2007. "Job Satisfaction and Quits," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00203158, HAL.
  6. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  7. Böckerman, Petri & Ilmakunnas, Pekka, 2007. "Job disamenities, job satisfaction, quit intentions, and actual separations: putting the pieces together," MPRA Paper 3245, University Library of Munich, Germany.
  8. repec:hal:journl:halshs-00203158 is not listed on IDEAS
  9. Richard B. Freeman, 1977. "Job Satisfaction as an Economic Variable," NBER Working Papers 0225, National Bureau of Economic Research, Inc.
  10. Garcia Perez, Jose Ignacio & Rebollo Sanz, Yolanda, 2005. "Wage changes through job mobility in Europe: A multinomial endogenous switching approach," Labour Economics, Elsevier, vol. 12(4), pages 531-555, August.
  11. Neal, Derek, 1999. "The Complexity of Job Mobility among Young Men," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 237-61, April.
  12. Farber, Henry S., 1999. "Mobility and stability: The dynamics of job change in labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 37, pages 2439-2483 Elsevier.
  13. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
  14. Gueorgui Kambourov & Iourii Manovskii, 2008. "Rising Occupational And Industry Mobility In The United States: 1968-97," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 41-79, 02.
  15. Munasinghe, Lalith & Sigman, Karl, 2004. "A hobo syndrome? Mobility, wages, and job turnover," Labour Economics, Elsevier, vol. 11(2), pages 191-218, April.
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Cited by:
  1. Adele Bergin, 2013. "Job Changes and Wage Changes: Estimation with Measurement Error in a Binary Variable," Economics, Finance and Accounting Department Working Paper Series n240-13.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  2. Ponzo, Michela, 2009. "On-the-job Search in Italian Labour Markets: An Empirical Analysis," MPRA Paper 15476, University Library of Munich, Germany.
  3. Ponzo, Michela, 2009. "On-the-job search in italian labour markets: an empirical analysis," MPRA Paper 24200, University Library of Munich, Germany.
  4. Luke Haywood, 2014. "Too Rich to Do the Dirty Work?: Wealth Effects on the Demand for Good Jobs," Discussion Papers of DIW Berlin 1355, DIW Berlin, German Institute for Economic Research.

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