THE RELATIVE IMPACTS OF THE LEVEL AND CHANGE IN WAGES ON QUITS

Investigates the effects on quits of the current level of wages and th e change in wages in order to test the proposition that the change in wages has a negative impact on quits, even controlling for the current level of wages. Finds that the percentage deviation in a worker's wag e change from its predicted level has an effect on quits that is three to six times stronger than the effect of the percentage deviation in a worker's current wage from its predicted level. Claims this result m ay have implications for the behaviour of firms in setting wages and i n the behaviour of wages over the business cycle.