An efficient matching model of auits and lavoffs is develo~ed to ac- count for several emGrica1 regulaiities. ~iffeiences betwee; quits and layoffs over the life and business cycles and across demographic grou s are generated by differential rates of general productivity growth. Tge standard approach to quits and layoffs, based on wage rigidity, is shown to be incapable of accounting for many of the empirical reg- ularities. Although a formal test rejects a structural prediction of the efficient turnover model. the s~ecification does well in ~redicting both the level of and time-series ;ariation in the fraction'of sepaAtions labeled quits.