Job Separation Rate

The job separation rate is a nice way of saying the “quitting rate” of workers at their jobs. The faster people quit their jobs, a.k.a. the higher the job separate rate, the higher employment will be at any given time in the long run, holding all else constant.

Question: What if we didn’t hold all else constant?

Answer: Unemployment isn’t just affected by how fast people quit, but also by how fast they find a new job, i.e. the “job finding rate.”

Together, the job separation rate and the job finding rate create the long-term (or “natural”) unemployment rate. This explains why we’ll never get down to 0% unemployment. Somewhere out there, there’s always someone telling their boss to suck it, contributing to the job separation rate and the long run unemployment rate.

See: Unemployment Rate.