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Declining Worker Turnover: The Role of Short-Duration Employment Spells

Author

Listed:
  • Michael J. Pries
  • Richard Rogerson

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 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.

Suggested Citation

  • Michael J. Pries & Richard Rogerson, 2022. "Declining Worker Turnover: The Role of Short-Duration Employment Spells," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(1), pages 260-300, January.
    • Handle: RePEc:aea:aejmac:v:14:y:2022:i:1:p:260-300
    DOI: 10.1257/mac.20190230
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    Cited by:

    1. Bhuller, Manudeep & Kostøl, Andreas & Vigtel, Trond Christian, 2019. "How Broadband Internet Affects Labor Market Matching," Memorandum 10/2019, Oslo University, Department of Economics.
    2. Bussolo,Maurizio & Lokshin,Michael M. & Oviedo,Nicolás & Torre,Ivan, 2022. "Job Tenure and Structural Change in the Transition Economies of Europe," Policy Research Working Paper Series 10206, The World Bank.
    3. Bussolo Maurizio & Capelle Damien & Lokshin Michael M. & Torre Iván & Winkler Hernan, 2023. "Explaining the Evolution of Job Tenure in Europe, 1995–2020," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 13(1), pages 1-32, January.
    4. Paul Osterman, 2024. "Reconsidering Occupational Internal Labor Markets: Incidence and Consequences," ILR Review, Cornell University, ILR School, vol. 77(3), pages 366-395, May.
    5. Potter, Tristan, 2024. "Destabilizing search technology," Journal of Monetary Economics, Elsevier, vol. 145(C).
    6. Raven Molloy & Christopher L. Smith & Abigail Wozniak, 2024. "Changing Stability in U.S. Employment Relationships: A Tale of Two Tails," Journal of Human Resources, University of Wisconsin Press, vol. 59(1), pages 35-69.
    7. M. Antonella Mancino & Leonardo Fabio Morales & Diego F. Salazar, 2023. "Signaling Worker Quality in a Developing Country: Lessons from a Certification Program," Borradores de Economia 1259, Banco de la Republica de Colombia.
    8. Kali, Raja & Liu, Andrew Yizhou, 2024. "Labor market power and worker turnover," European Economic Review, Elsevier, vol. 163(C).
    9. Poschke, Markus, 2025. "Wage employment, unemployment and self-employment across countries," Journal of Monetary Economics, Elsevier, vol. 149(C).
    10. Serdar Birinci & Kurt See & Shu Lin Wee, 2020. "Job Applications and Labor Market Flows," Working Papers 2020-023, Federal Reserve Bank of St. Louis, revised Jan 2023.
    11. Berlinski, Samuel & Gagete-Miranda, Jessica, 2025. "Enforcement spillovers under different networks: The case of quotas for persons with disabilities in Brazil," Journal of Development Economics, Elsevier, vol. 176(C).
    12. Guimarães, Luís & Mazeda Gil, Pedro, 2022. "Looking ahead at the effects of automation in an economy with matching frictions," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    13. Bachmann, Rüdiger & Bayer, Christian & Merkl, Christian & Seth, Stefan & Stüber, Heiko & Wellschmied, Felix, 2021. "Worker churn in the cross section and over time: New evidence from Germany," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 781-797.
    14. Snell, Andy & Thomas, Jonathan P. & Martins, Pedro, 2025. "Bias in estimating returns to tenure: The impact of monopsony power," Economics Letters, Elsevier, vol. 247(C).
    15. Maurizio Bussolo & Michael M. Lokshin & Nicolás Oviedo & Iván Torre, 2024. "The evolution of job tenure in transition economies," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(2), pages 449-471, April.
    16. Michael Lachanski, 2023. "Point estimation of certain measures in organizational demography using variable-r methods," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 49(33), pages 865-904.
    17. Charles L. Baum, 2022. "Seven jobs in a lifetime? An analysis of employee tenure," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 543-567, April.
    18. Kevin Donovan & Will Jianyu Lu & Todd Schoellman, 2023. "Labor Market Dynamics and Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(4), pages 2287-2325.
    19. repec:rza:wpaper:895 is not listed on IDEAS

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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