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Labor Turnover Costs and Average Labor Demand

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  • Bertola, Giuseppe

Abstract

Labor turnover costs may or may not decrease average employment in a partial equilibrium model of labor demand depending on the form of the revenue function, on the rates of discount and of labor attrition, and on the relative size of hiring and firing costs. If discount and attrition rates are strictly positive, firing costs may well increase average employment even when hiring costs reduce it. Copyright 1992 by University of Chicago Press.

Suggested Citation

  • Bertola, Giuseppe, 1992. "Labor Turnover Costs and Average Labor Demand," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 389-411, October.
  • Handle: RePEc:ucp:jlabec:v:10:y:1992:i:4:p:389-411
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    File URL: http://dx.doi.org/10.1086/298293
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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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