The Effect of the 2018-2019 United States Government Shutdown on Federal Workforce Turnover

Abstract

As shutdowns increase in frequency and length for the US federal government, it is not difficult to postulate that such dysfunction might have an impact on the federal government in terms of its agencies’ relative ability to retain the talent necessary to prevent loss of capacity and further dysfunction. However, we know little about the effects of these phenomena on the US federal civil service labor market. In this paper, we examine the intervening impact of the 2018-2019 shutdown on the federal labor market. Through the collection of agency contingency plans and FOIA responses, we account for the varying extent to which an agency’s workforce was furloughed. We exploit this variation to test the impact of the shutdown on agencies through both the binary intervention of whether an agency was shut down and the continuous “intensity” of that shutdown through the percentage of agencies’ workforces that were furloughed. Our results indicate that the 2019 shutdown led to an increase in separations across agencies overall. The scope of this impact seems driven by both voluntary and nonvoluntary separations, though the intensity of that impact is not associated with the number of employees furloughed. When modeling the nature of overall separation trends within agencies, we see that voluntary turnovers are diminished in relation to nonvoluntary types of separation in response to a shutdown. When breaking types of separation out by specific types, this seems to be driven particularly by the increased rate of terminations relative to other types of turnover. We provide a unique and important view into the human capital impacts of government shutdowns.

Keywords: Government shutdowns, Federal labor market, Separations, Accessions, Longitudinal analyses

JEL Classification: H50, H83, J45