Factors Affecting the Output and Quit Propensities of Production Workers.

The authors formulate a simultaneous-equation model to explain the wages, output, education, and quit propensities of a sample of production workers. Their principal finding is that individuals that choose more education than they would expect from their observed characteristics have lower than expected quit propensities. This relationship would bias standard estimates of rates of return to education. The authors also find that the output of nonwhites was no lower than that of whites, although their wages on previous jobs were lower, and that workers with high levels of output were more likely to quit than were workers whose output was average. Copyright 1991 by The Review of Economic Studies Limited.