Please use this identifier to cite or link to this item: http://hdl.handle.net/2381/4441
Title: The Impact of Labour Turnover: Theory and Evidence from UK Micro-Data
Authors: Garino, Gaia
Martin, Christopher
First Published: May-2007
Publisher: Dept. of Economics, University of Leicester
Abstract: We analyse the impact of labour turnover on profits. We extend the efficiency wage model of Salop (1979) by separating incumbent and newly hired workers in the production function. We show that an exogenous increase in the turnover rate can increase profits, but only where firms do not choose the wage. This effect of turnover varies across firms as it depends on turnover costs, the substitutability of incumbents and new hires and other factors. We test our model on UK cross-sectional establishment-level data. We find that our predictions are consistent with the data.
Series/Report no.: Discussion Papers in Economics
05/10
Links: http://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp05-10.pdf
http://hdl.handle.net/2381/4441
Type: Report
Appears in Collections:Reports, Dept. of Economics

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