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|Title:||Labour turnover and firm performance|
|Keywords:||Firm Performance; Labour Turnover; Quit Rates|
|Citation:||Economics and Finance Discussion Papers, Brunel University, 07-25.|
|Abstract:||We argue that labour turnover can increase profitability, contrary to conventional wisdom. We analyse an extension of the Salop (1979) model of the impact of turnover that differentiates between incumbent and newly hired workers in the production function. An exogenous increase in the turnover rate can increase profits if firms do not choose wages unilaterally. Evidence from UK establishment-level data supports our theoretical priors and suggests that increased turnover can indeed increase profitability.|
|Appears in Collections:||Economics and Finance|
Dept of Economics and Finance Research Papers
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