Creating a More Quit-Friendly National Workforce? Individual Layoff History and Voluntary Turnover

Abstract

While Bureau of Labor Statistics data reveal that U.S. employers laid off over 33 million employees since 1994, virtually no research has addressed the behavior of layoff victims upon reemployment. In a first step, we investigate how layoffs shape voluntary turnover behavior in subsequent jobs. Utilizing a recently developed fixed effects specification of survival analysis, we find that a layoff history is positively associated with quit behavior. This effect is partially mediated by underemployment and job satisfaction in the post-layoff job. The remaining indirect effect is consistent with the notion that layoffs produce a psychological spillover to post-layoff employment, which then manifests in quit behavior.We also find that layoff effects on turnover attenuate as an individual’s layoffs accumulate and vary in magnitude according to the turnover “path” followed by the leaver.