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Worker Separations in a Nonstationary Corporate Environment

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  • Dohmen, Thomas

    (University of Bonn and IZA)

  • Pfann, Gerard A.

    (Maastricht University)

Abstract

This paper investigates differences in worker turnover characteristics between periods of workforce expansion and contraction in a firm. We derive a Cox proportional hazard model from a simple model of job separation based on the expected surpluses from the firm and its workers. We account for non-stationarity in the baseline hazard reversing the role of calendar time and employment duration (Imbens (1994)), and estimate the model using personnel data from a large Dutch aircraft manufacturer over a period from January 1987 until March 14th, 1996, one day before its bankruptcy. Performance evaluations, blue versus white collar employment, and career paths within the firm are found to play an important role explaining differences in turnover behavior. A generally important result is that smooth functional forms of the age effect on worker mobility can produce misleading results, blurring a better understanding of the design of early retirement schemes for corporate reorganizations.

Suggested Citation

  • Dohmen, Thomas & Pfann, Gerard A., 2000. "Worker Separations in a Nonstationary Corporate Environment," IZA Discussion Papers 201, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp201
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    2. Mok, Penny & Mason, Geoff & Stevens, Philip & Timmins, Jason, 2012. "A Good Worker is Hard to Find: Skills Shortages in New Zealand Firms," Occasional Papers 12/5, Ministry of Economic Development, New Zealand.
    3. Gielen, Anne C. & van Ours, Jan C., 2006. "Age-specific cyclical effects in job reallocation and labor mobility," Labour Economics, Elsevier, vol. 13(4), pages 493-504, August.
    4. Bernhard Boockmann & Susanne Steffes, 2010. "Workers, Firms, or Institutions: What Determines Job Duration for Male Employees in Germany?," ILR Review, Cornell University, ILR School, vol. 64(1), pages 109-127, October.
    5. Thomas Dohmen & Hartmut F. Lehmann & Mark E. Schaffer, 2014. "Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data, 1997 to 2002," ILR Review, Cornell University, ILR School, vol. 67(2), pages 504-531, April.
    6. Landeghem, Bert Van & Cörvers, Frank & Grip, Andries de, 2017. "Is there a rationale to contact the unemployed right from the start? Evidence from a natural field experiment," Labour Economics, Elsevier, vol. 45(C), pages 158-168.
    7. Dohmen, Thomas J., 2004. "Performance, seniority, and wages: formal salary systems and individual earnings profiles," Labour Economics, Elsevier, vol. 11(6), pages 741-763, December.
    8. Boockmann, Bernhard & Fries, Jan & Göbel, Christian, 2018. "Specific measures for older employees and late career employment," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 159-174.
    9. repec:lan:wpaper:4362 is not listed on IDEAS
    10. Heinz, Matthias & Drzensky, Frank, 2013. "The Hidden Costs of Downsizing," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79764, Verein für Socialpolitik / German Economic Association.
    11. V Maltezou & G Johnes, 2008. "It''S Been A Long Time: A Comparative Analysis Of Job Duration In Banking," Working Papers 596221, Lancaster University Management School, Economics Department.
    12. repec:lan:wpaper:4491 is not listed on IDEAS
    13. Boockmann, Bernhard & Steffes, Susanne, 2005. "Individual and Plant-level Determinants of Job Durations in Germany," ZEW Discussion Papers 05-89, ZEW - Leibniz Centre for European Economic Research.
    14. Boockmann, Bernhard & Steffes, Susanne, 2007. "Seniority and Job Stability: A Quantile Regression Approach Using Matched Employer-Employee Data," ZEW Discussion Papers 07-014, ZEW - Leibniz Centre for European Economic Research.
    15. Piekkola, Hannu, 2002. "Transferability of Human Capital and Job Switches," Discussion Papers 794, The Research Institute of the Finnish Economy.

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    More about this item

    Keywords

    personnel economics; Turnover;

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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