Raising the bar for models of turnover

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Raising the bar for models of turnover

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Erwan Quintin
John J. Stevens

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Abstract

It is well known that turnover rates fall with employee tenure and employer size. We document a new empirical fact about turnover: Among surviving employers, separation rates are positively related to industry-level exit rates, even after controlling for tenure and size. Specifically, in a dataset with over 13 million matched employee-employer observations for France, we find that, all else equal, a 1 percentage point increase in exit rates raises separation rates by 1/2 percentage point on average. Among current year hires, the average effect is twice as large. This relationship between exit rates and separation rates is robust to a host of data and statistical considerations. We review several standard models of worker turnover and argue that a model with firm-specific human capital accumulation most easily accounts for this new empirical fact.

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Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2005-23.

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Date of creation: 2005
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Handle: RePEc:fip:fedgfe:2005-23

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Other versions:
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Other versions:
- Erwan Quintin & John Stevens, 2005. "Growing Old Together: Firm Survival and Employee Turnover," Topics in Macroeconomics, Berkeley Electronic Press, vol. 5(1), pages 1319-1319. [Downloadable!] (restricted)
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Other versions:
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Other versions:
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Erwan Quintin & John J. Stevens, 2005. "Growing old together: firm survival and employee turnover," Finance and Economics Discussion Series 2005-22, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
Other versions:
- Erwan Quintin & John Stevens, 2005. "Growing Old Together: Firm Survival and Employee Turnover," Topics in Macroeconomics, Berkeley Electronic Press, vol. 5(1), pages 1319-1319. [Downloadable!] (restricted)

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