Quits, Moves, Spatial Equilibrium and Workplace Relocation

Abstract

When worker commutes are suboptimal, quits and moves are related. Either a quit, a move, or both can achieve an optimal commute. However, with fixed costs to quitting and moving, a quit or move alone is more likely than both together. Payroll records of a firm which relocated from the central business district to a suburb of a major metropolitan area confirm this. They demonstrate that white employees rarely quit and move at the same time. Simultaneous bivariate probit estimates of move and quit behavior demonstrate that uncontrolled shocks to quits and mover are negatively correlated. Furthermore, during the spatial dislocation caused by the firm's relocation, quits and moves were direct substitutes. Employees who quit were approximately 29% less likely to move. Those who moved were approximately 40% less likely to quit.