Worker Turnover, Capital Dispersion, and Matching
A model acknowledging technology and wage dispersion, search frictions, and costly worker turnover is used for testing the notion of random matching. Using a linked employer-employee data set on roughly 9,000 Norwegian establishments and 200,000 jobs during the period 1989-95, I show that establishments investing more in capital, pay more, and experience lower worker turnover rate. Strictly convex turnover costs are identified. High-wage establishments post on average less intensively than low-wage establishments. Positive relationships between wages and posting are observed for high-tech industries and in the capital and surroundings. Thus, the notion of random matching is generally rejected. Copyright 2006 The Author; Journal compilation 2006 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..
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Volume (Year): 20 (2006)
Issue (Month): 3 (09)
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