Confident about Quitting: Job Leavers and Labor Market Optimism

A comparison of the quits rate from the Job Openings and Labor Turnover Survey (JOLTS) and a similar measure derived from the Current Population Survey (CPS) suggests voluntary job leavers are nearly as optimistic about labor market opportunities as they have been at any time in the past 15 years. The quits rate in the Job Openings and Labor Turnover Survey (JOLTS) is one of the most commonly used measures of voluntary turnover. However, this rate provides a limited picture of churn in the labor market: the JOLTS rate is an employer-level measure and thus lacks information about individuals ’ future employment status after leaving their jobs. This Bulletin examines the historical relationship between the JOLTS quits rate and job-to-job (J2J) flows derived from the Current Population Survey (CPS) to provide a more complete measure of voluntary turnover. The quits rate counts the fraction of individuals who voluntarily left employers. J2J flows measure the fraction of individuals who report working for a different employer compared with a month ago. Comparing J2J flows from the CPS with the quits rate from JOLTS reveals two intuitive trends. In booms, when the labor market is tight and job opportunities are plentiful, the quits rate is high relative to what J2J flows predict. This suggests job quitters in JOLTS are optimistic about future employment opportunities and quit without a job in hand or take some time before starting a new job. In contrast, in recessions, the quit