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What Causes Labor Turnover To Vary?

Author

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  • Edward P. Lazear
  • Kristin McCue

Abstract

Most turnover reflects churn, where hires replace departures. Churn varies substantially by employer, industry and worker characteristics. For example, leisure and hospitality turnover is more than double that of manufacturing. In the LEHD (QWI) data, permanent employer differences account for 36% of the variation in churn. The cost of churn is proxied by the mean wage and the benefit by the variance in wages. QWI and JOLTS data confirm predictions that high mean wage labor markets experience less churn and high wage-variance ones experience more churn. Additionally, less educated, younger and male workers have higher separation and churn rates.

Suggested Citation

  • Edward P. Lazear & Kristin McCue, 2018. "What Causes Labor Turnover To Vary?," NBER Working Papers 24873, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24873
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    Citations

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    Cited by:

    1. Andreas Hauptmann, 2019. "Worker turnover in German exporting establishments," Economics Bulletin, AccessEcon, vol. 39(2), pages 1266-1271.
    2. Daniel W. Elfenbein & Adina D. Sterling, 2018. "(When) Is Hiring Strategic? Human Capital Acquisition in the Age of Algorithms," Strategy Science, INFORMS, vol. 3(4), pages 668-682, December.
    3. Quintana, Rodrigo & Cravo, Tulio, 2019. "Demand-Driven Training and Job Turnover: The Effects of Brazil’s Pronatec-MDIC at Firm and Worker Level," IDB Publications (Working Papers) 9688, Inter-American Development Bank.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J0 - Labor and Demographic Economics - - General
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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