Wages, Separations, and Job Tenure: On-the-Job Specific Training or Matching?

A general stochastic model of optimal job separation behavior is developed in this paper. The model nests both the job training and th e job-matching hypotheses of the wage-tenure relationship as special cases. The purpose of the paper is to compare the implications of the two hypotheses for job turnover. The principal theoretical result is that expected wealth-maximizing separation strategies are qualitatively identical under the two hypotheses. Although the empirical implications of the two hypotheses for observations on the distribution of completed job-spell lengths are similar as a conseque nce, they are not quite identical. Copyright 1988 by University of Chicago Press.