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Relative Wages, Wage Growth, and Quit Behavior


  • Galizzi, Monica
  • Lang, Kevin


Using Italian Social Security records for male workers from a sample of firms in Turin from 1981 to 1983, the authors show that, conditional on the worker's own wage, the average wage in the establishment for similar workers is negatively related to quits. They also find that this variable predicts future wage growth. This is consistent with an economic model in which workers compare the long-run value of employment opportunities when making quit decisions. Copyright 1998 by University of Chicago Press.

Suggested Citation

  • Galizzi, Monica & Lang, Kevin, 1998. "Relative Wages, Wage Growth, and Quit Behavior," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 367-391, April.
  • Handle: RePEc:ucp:jlabec:v:16:y:1998:i:2:p:367-91

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    References listed on IDEAS

    1. Viscusi, W Kip, 1979. "Job Hazards and Worker Quit Rates: An Analysis of Adaptive Worker Behavior," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(1), pages 29-58, February.
    2. Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1007-1047.
    3. McLaughlin, Kenneth J, 1991. "A Theory of Quits and Layoffs with Efficient Turnover," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 1-29, February.
    4. Parsons, Donald O, 1991. "The Job Search Behavior of Employed Youth," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 597-604, November.
    5. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    6. Ann P. Bartel, 1982. "Wages, Nonwage Job Characteristics, and Labor Mobility," ILR Review, Cornell University, ILR School, vol. 35(4), pages 578-589, July.
    7. Glenn M. MacDonald, 1988. "Job Mobility in Market Equilibrium," Review of Economic Studies, Oxford University Press, vol. 55(1), pages 153-168.
    8. Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-1260, December.
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