Volume 22, Number 2 (Spring) 1987
Ippolito, Richard A. 1987. "Why Federal Workers Don't Quit." Journal of Human Resources 22(2):281-299.
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.
The author is an economist with the Pension Benefit Guaranty Corporation. The views in this paper are solely those of the author, hence do not reflect the position of the PBGC. He is indebted to Alan Gustman, Pauline Ippolito, Olivia Mitchell, and Thomas Steinmeier for comments on an earlier version.
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