Recent theoretical developments postulate that much of the mobility in the labour market arises from imperfect information. As new information is acquired, either about alternative opportunities or about the productivity of the current job, a worker may quit or be laid off. The paper reviews some of these developments and evaluates the predictions they generate against data from the Australian Mobility Survey. It is found that the tenure, age and occupational effects on mobility are broadly consistent with these predictions. The implications of these findings are discussed with reference to the longstanding concern about the flexibility of the Australian labour market.
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