As the chart above shows, quits rates have been low when economies have been weak, such as during the global financial crisis and the start of the COVID-19 pandemic. People typically don’t leave jobs if they don’t already have another lined up or are pessimistic about the economy, Schickling noted. Quits rates have been correspondingly higher in stronger economies.
The pandemic sent millions of older workers into an earlier-than-anticipated retirement, one of several reasons for the labor shortage that is adding to inflationary concerns. Schickling expects only around 20% of those early retirees to return to the workforce this year and only around 40% ever to return, exacerbating labor market tightness that creates the conditions for what has become known as the Big Quit, or the Great Resignation. Many of these retirees have realized they don’t need to return to work immediately, because they have accumulated savings (benefiting from elevated asset prices), their spouses still work, or they’re eligible for pensions or government benefits, he said.