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Beyond BLS

Beyond BLS briefly summarizes articles, reports, working papers, and other works published outside BLS on broad topics of interest to MLR readers.

September 2022

To quit or not to quit . . . with conditions?

Summary written by: Maya B. Brandon

With the coronavirus disease 2019 (COVID-19) pandemic came a change in the workforce. In “Great Resignations’ are common during fast recoveries” (Economic Letter, Federal Reserve Bank of San Francisco, April 4, 2022), Bart Hobijn examines how the fast-paced COVID-19 labor market recovery compares with previous rapid recoveries. He analyzes historical quits rate data, provided by the U.S. Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS), Current Population Survey (CPS), and the Manufacturing Labor Turnover Survey (MLTS), to support his findings.

Workers have been quitting their jobs at record levels—a withdrawal referred to as the “Great Resignation.” Although many people deem this “wave of resignations to be driven by people reconsidering their career prospects and work-life balance,” Hobijn argues otherwise. He states that the Great Resignation is driven by “young and less-educated workers in industries and occupations that were most adversely affected by the pandemic” and that it is not an irregularity but a pattern seen in previous recoveries. The MLTS was discontinued in 1981 and JOLTS began in 2000, and despite the gap in time, Hobijn creates a proxy to show the patterns of economic uncertainty, recessions, and workers quitting their jobs. The MLTS and JOLTS data do not include characteristics of the workers quitting, so he pairs the CPS data with the JOLTS data to reveal who is quitting and why.

Using the CPS data, Hobijn outlines four findings about the COVID-19 pandemic recovery: (1) high-quits industries also saw rapid job growth in 2021, (2) this growth pattern is also evidenced across occupations—those with high quits later saw high employment growth, (3) quitters are not shifting to new occupations or industries, and (4) the workers who are quitting are largely young, with less education. The latter conclusion “is reflective of a normal cyclical pattern in which the quits rate of younger workers responds more to business cycle conditions and drives a large part of the movements in the overall quits rate.” The pandemic presented a cycle of quitting but also a cycle of mass layoffs that led to many vacancy postings. These vacancies were available to those laid off and unemployed as well as to those employed and looking for new opportunities. On the basis of offers presented and job status, workers have been able to negotiate for better wages, benefits, or arrangements at their current employer or to quit and move on to other jobs with higher wages. Hobijn relabels the “Great Resignation” as a “Great Renegotiation.”

In conclusion, the “Great Resignation” is not an irregularity and fast recoveries are often characterized by waves of quits. Hobijn provides historical evidence to support his argument that the recent wave of quits are not driven “by people reconsidering their career prospects and work-life balance” but instead are driven by younger and less-educated workers in industries that were heavily affected by the COVID-19 pandemic.