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Worker Turnover, Capital Dispersion, and Matching

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  • Harald Dale-Olsen

Abstract

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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  • Harald Dale-Olsen, 2006. "Worker Turnover, Capital Dispersion, and Matching," LABOUR, CEIS, vol. 20(3), pages 395-431, September.
  • Handle: RePEc:bla:labour:v:20:y:2006:i:3:p:395-431
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    1. Walter Y. Oi, 1974. "The Economics of Product Safety: A Rejoinder," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 689-695, Autumn.
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