A CROSS-INDUSTRY TIME-SERIES ANALYSIS OF QUITS

This study estimates quit equations for 19 manufacturing industries wi th pooled cross-sectional time-series data over a 21 year period. The most important finding is that workers respond more quickly to changes in their industry wage than to changes in aggregate wages or prices i n deciding whether to quit. A model is developed demonstrating that wi th this result, efficiency wage theory may be able to explain nominal wage rigidity. The results also suggest that workers respond more quic kly to changes in prices than to changes in wages in other industries in deciding whether to quit.