Worker churning and firms' wage policies
Purpose – The purpose of this paper is to provide empirical evidence of a causal nature about the relationship between wages and churning (“excessive” worker turnover). Design/methodology/approach – Matched employer-employee panel data from Portugal, covering the period 1986-2000 are used in the study. Econometric methods are also used, including random effects tobit models, fixed effects and instrumental variables. Findings – Unlike in previous research (which typically does not consider causal relationships), the paper presents evidence that wages do not necessarily decrease the amount of churning. If employers are forced to increase pay, they may respond by hiring different workers. Detailed evidence about the nature of job and worker flows and churning levels across industries is presented. Research limitations/implications – Future research should examine the paths of workers whose wages are affected by collective bargaining. Practical implications – The paper provides additional evidence that effort may not be particularly sensitive to wages in some industries/occupations. The should be a better understanding of role of wages in personnel policies. Originality/value – This paper is probably the first that seeks to examine the causal relationship between wages and churning. The results will be of interest to labour economists and human resource management experts.
Volume (Year): 29 (2008)
Issue (Month): 1 (May)
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References listed on IDEAS
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- Lane, Julia & Stevens, David & Burgess, Simon, 1996. "Worker and job flows," Economics Letters, Elsevier, vol. 51(1), pages 109-113, April.
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- Imran Rasul & Iwan Barankay & Orana Bandiera, 2005.
"Social preferences and the response to incentives: Evidence from personnel data,"
Natural Field Experiments
00212, The Field Experiments Website.
- Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 917-962, August.
- Hamermesh, D.S. & Hassink, W.H.J. & van Ours, J.C., 1996. "Job turnover and labor turnover : A taxonomy of employment dynamics," Other publications TiSEM 1f3fab1f-b02a-485a-bb8f-f, Tilburg University, School of Economics and Management.
- John M. Abowd & Patrick Corbel & Francis Kramarz, 1996.
"The Entry and Exit of Workers and the Growth of Employment: An Analysis of French Establishments,"
NBER Working Papers
5551, National Bureau of Economic Research, Inc.
- John M. Abowd & Patrick Corbel & Francis Kramarz, 1999. "The Entry And Exit Of Workers And The Growth Of Employment: An Analysis Of French Establishments," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 170-187, May.
- Abowd, John M & Corbel, Patrick & Kramarz, Francis, 1997. "The Entry and Exit of Workers and the Growth of Employment: An Analysis of French Establishments," CEPR Discussion Papers 1765, C.E.P.R. Discussion Papers.
- Burgess, Simon & Lane, Julia & Stevens, David, 2000.
"Job Flows, Worker Flows, and Churning,"
Journal of Labor Economics,
University of Chicago Press, vol. 18(3), pages 473-502, July.
- repec:ner:tilbur:urn:nbn:nl:ui:12-86873 is not listed on IDEAS
- Burgess, Simon & Lane, Julia & Stevens, David, 2001. "Churning dynamics: an analysis of hires and separations at the employer level," Labour Economics, Elsevier, vol. 8(1), pages 1-14, January.
- Ilmakunnas, Pekka & Maliranta, Mika, 2003.
"Worker Inflow, Outflow, and Churning,"
861, The Research Institute of the Finnish Economy.
- Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, June.
- Ana Rute Cardoso & Pedro Portugal, 2005. "Contractual Wages and the Wage Cushion under Different Bargaining Settings," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 875-902, October.
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