Issues

U.S. Department of Labor

Bureau of Labor Statistics

Summary 00-17 October 2000

 in Labor Statistics

Unemployed Job Leavers: A Meaningful Gauge of Confidence in the Job Market?

The expansion that began in March 1991 is

now in its 10th year. Over this period, the

unemployment rate has fallen to a 30-year low,

and employment growth has been robust. As

labor market conditions have tightened, there

has been increased interest in the number of

unemployed persons who have voluntarily left

their jobs. Some analysts consider this series a

gauge of workers’ confidence about the job market, with an increase in the number of unemployed job leavers, or in their share of total

unemployment, indicating rising confidence.

The rationale is that workers would not voluntarily leave a job and enter into a job search

unless they perceived that prospects for a successful search were quite good. The appropriateness of these measures, either on a monthto-month or longer-term basis, as a gauge of

workers’ confidence in the job market is questionable, however.

This report examines several issues associated with data on unemployed job leavers collected each month in the Current Population

Survey (CPS).1 First and foremost, unemployed job leavers may not be a good proxy for

total job leavers, the vast majority of whom

may never pass through the interim stage of

unemployment. It is likely that most job leavers

wait until they have found another job before

they leave their old one, or that they leave the

labor force altogether. Even among those job

leavers who are classified in the CPS as unemployed, some may, indeed, have quit their jobs

because they were confident about employment opportunities. Others, however, may

have quit because they had short-term personal

reasons—family obligations or transportation

problems, for example. Still others may have

quit because they became dissatisfied with their

job. Many of these situations have little to do

with their assessment of employment opportunities.

Even more problematic is the use of the

trend in job leavers’ share of total unemployment as a gauge of workers’ confidence. That

measure is less appropriate than the job leavers

level, because it can be less dependent on a

change in the number of unemployed job

leavers themselves than on a change in the number of persons who are unemployed for other

reasons. Job losers, in particular, make up the

largest share of the unemployed. In 1999, unemployed job leavers made up only 13.3 percent of the total unemployed, while the number unemployed for the other reasons (which

also includes new labor force entrants and reentrants) comprised 86.7 percent. (See chart

1.) Any change in the job leavers’ share of the

unemployed can reflect, to a large degree, the

declines or increases in the other categories of

unemployment. Hence, a change in the share

of the unemployed made up of job leavers

would not appear to be a particularly revealing

measure of changes in the willingness of perJob leavers

Job losers

Reentrants

New entrants

13.3%

44.6%

34.1%

8.0%

Chart 1. Percent of unemployed persons by reason for unemployment,

1999 annual averages

sons to quit their jobs.

Perhaps a more useful gauge for assessing

the trend in job leavers (though not as a jobmarket confidence measure) is as a share of the

labor force. The unemployed job leavers measure, when expressed in this manner, exhibits a

pattern more cyclical than countercyclical; this

proportion generally rises during recessions and

declines during expansions. The cyclical pattern for job leavers is not as pronounced as it is

for unemployed job losers (chart 2), although

the high correlation coefficient between these

two series (0.49) tends to confirm their similarity. This evidence would seem to counter a

hypothesis that an increase in unemployed job

leavers indicates workers’ increased confidence

in the labor market.

For additional information on job leavers

and a technical description of the Current Population Survey from which the data used in this

report were derived, contact Randy E. Ilg

Office of Employment and Unemployment

Statistics, Bureau of Labor Statistics, Washington, DC 20212. Tel: (202) 691-6378;

e-mail: ilg_r@bls.gov

Information in this report is available to

sensory impaired individuals on request. Voice

phone: (202) 691-5200; Federal Relay Service:

1-800-877-8339. The material is in the public

domain and, with appropriate credit, may be

reproduced without permission.

1

 The historical comparison of the job leavers

series was affected by the introduction of a new

questionnaire and survey methodology in January

1994. In particular, several changes to the questionnaire—both definitional and operational—

resulted in differences in the way the unemployed

are distributed among the reason categories.

Although the new methodology did not affect

the overall unemployment rate, it did affect the

overall composition of individuals’ reason for

unemployment. Research at the Bureau of Labor

Statistics has shown that the new methodology

significantly increased the proportion of unemployed classified as reentrants and decreased the

proportion of unemployed in the other reason

categories.

Job losers 44.6%

Reentrants 34.1%

Job leavers 13.3%

New entrants 8.0%
Chart 2. Unemployed job losers and leavers as a percent of the labor force, seasonally adjusted 3-month 

moving average, March 1967-July 2000

Unemployed job losers

as a percent of the labor force

Unemployed job leavers

as a percent of the labor force

Unemployed job losers

NOTE: Shaded areas represent recessions. Vertical dashed line indicates CPS redesign.

'67 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99

Unemployed job leavers

Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. 

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

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