ABSTRACT
People do change employers, so a natural extension of the job search model is to drop the assumption that jobs last forever. There are, however, a number of plausible reasons why individuals change jobs. They may receive a better wage offer, their current wage may fall (relative, say, to the value they attach to leisure), they may acquire information which leads them to reassess (downward) their productivity with the firm, or they may be
permanently laid off. There is an extensive theoretical literature which builds many of these features, generally singly, into the job search framework. All of these models have essentially the same qualitative predictions. This common feature of their comparative statics (dynamics) does not imply, however, that they are observationally equivalent, i.e. that the data that would reject anyone of them would reject all of them. However, it does imply that distinguishing between the models might not be easy.
