Comment on Louis Jacobson's "A Tale of Employment Decline in Two Cities: How Bad Was the Worst of Times?". Reply

Jacobson, Louis
January 1987
ILR Review;Jan87, Vol. 40 Issue 2, p284
Academic Journal
This article presents the author's reply to the comments made on his article by economists Barry A. Gerhart and Paul Jarley. Gerhart and Jarley put their fingers on two arguments that particularly give rise to such perceptions: the claim that attrition is not cyclically sensitive, and the claim that the earnings trajectories of workers leaving an industry due to displacement and due to attrition are similar. Furthermore, they argue that because aggregate quits are cyclically sensitive, attrition among the workers in the sample must also be cyclically sensitive. This need not be the case. Aggregate quits can vary cyclically even if quit rates of workers with specific characteristics are constant. This argument may be correct for young workers beginning their careers. But job leaving falls substantially with tenure and age. In the steel industry, 28 percent of newly hired workers leave within one year, whereas less than 3 percent of steel workers who are less than 50 years old and have over 10 years of service separate each year.


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