At least from what I'm seeing, most people are not quitting and doing nothing. The ones I've seen are taking other jobs. I had two coworkers quit my pervious team and took jobs that have remote options and higher pay (2x in one case).

I think we're seeing people take early retirement (and some increase in mortality/disability) and the higher than usual vacancies they're leaving create an effect where people get hired or promoted into those spaces. The ones who get promoted then leave a vacancy at the lower levels for other to jump into. The increase in wages over the past couple years is enticing people jump around, which I believe is creating a lot of inefficiency (along with potential burnout), which is leading to companies increasing headcount to try to make up for it, while exacerbating the labor supply issues.

But who knows...