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Why Federal Workers Don't Quit

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  • Richard A. Ippolito

Abstract

Quit rates in the federal government are abnormally low. Some economists and the federal government itself have taken this to mean that federal wages are too high. This paper provides an alternative explanation. It shows that the timing of compensation across a career as well as its level affect quit rates. Pensions, in particular, impose large penalties on workers who quit early. And the portion of federal pay in the form of pensions is very high. This feature of the federal pay structure may explain its abnormally low quit rate. As a general proposition, quit rates are poor indices for judging pay adequacy.

Suggested Citation

  • Richard A. Ippolito, 1987. "Why Federal Workers Don't Quit," Journal of Human Resources, University of Wisconsin Press, vol. 22(2), pages 281-299.
    • Handle: RePEc:uwp:jhriss:v:22:y:1987:i:2:p:281-299
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    Citations

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    Cited by:

    1. Alan B. Krueger, 1988. "Are Public Sector Workers Paid More Than Their Alternative Wage? Evidence from Longitudinal Data and Job Queues," NBER Chapters, in: When Public Sector Workers Unionize, pages 217-242, National Bureau of Economic Research, Inc.
    2. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    3. Robert L. Clark & Joseph F. Quinn, 1999. "Effects of Pensions on Labor Markets and Retirement," Boston College Working Papers in Economics 431, Boston College Department of Economics.
    4. Panizza, Ugo, 1998. "Why Do Lazy People Make More Money?: The Strange Case of the Public Sector Wage Premium," IDB Publications (Working Papers) 1896, Inter-American Development Bank.
    5. Ann McDermed & Robert L. Clark & Steven G. Allen, 1989. "Pension Wealth, Age-Wealth Profiles, and the Distribution of Net Worth," NBER Chapters, in: The Measurement of Saving, Investment, and Wealth, pages 689-736, National Bureau of Economic Research, Inc.
    6. Ashok Thomas & Luca Spataro, 2016. "The Effects Of Pension Funds On Markets Performance: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 30(1), pages 1-33, February.
    7. Andrietti, Vincenzo, 2004. "Pension choices and job mobility in the UK," UC3M Working papers. Economics we043713, Universidad Carlos III de Madrid. Departamento de Economía.
    8. ANDRIETTI Vincenzo & HILDEBRAND Vincent, 2001. "Pension Portability and Labour Mobility in the United States. New Evidence from SIPP Data," IRISS Working Paper Series 2001-03, IRISS at CEPS/INSTEAD.
    9. Vincenzo Andrietti & Vincent A. Hildebrand, 2016. "Evaluating Pension Portability Reforms: The Tax Reform Act Of 1986 As A Natural Experiment Abstract," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1402-1424, July.
    10. George J. Borjas, 2002. "The Wage Structure and the Sorting of Workers into the Public Sector," NBER Working Papers 9313, National Bureau of Economic Research, Inc.
    11. Jonathan R. Peterson, 2023. "Employee bonding and turnover efficiency," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 32(1), pages 223-244, January.
    12. Fang, Tony & Messacar, Derek, 2019. "Voluntary Job Separations and Traditional versus Flexible Workplace Saving Plans: Evidence from Canada," IZA Discussion Papers 12262, Institute of Labor Economics (IZA).
    13. Ugo Panizza, 1999. "¿Por qué la gente floja gana más dinero? El extraño caso de la prima salarial del sector público," Research Department Publications 4177, Inter-American Development Bank, Research Department.
    14. Richard Disney & Carl Emmerson, 2002. "Choice of pension scheme and job mobility in Britain," IFS Working Papers W02/09, Institute for Fiscal Studies.
    15. Dale-Olsen, Harald, 2006. "Wages, fringe benefits and worker turnover," Labour Economics, Elsevier, vol. 13(1), pages 87-105, February.
    16. Serden Özcan & Toke Reichstein, 2009. "Transition to Entrepreneurship from the Public Sector: Predispositional and Contextual Effects," Management Science, INFORMS, vol. 55(4), pages 604-618, April.
    17. Ippolito, Richard A, 1996. "A Study of Wages and Reliability," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 149-189, April.
    18. Steven G. Allen & Robert L. Clark & Ann A. McDermed, 1988. "Why Do Pensions Reduce Mobility?," NBER Working Papers 2509, National Bureau of Economic Research, Inc.

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