Keywords: Firm survival, employee turnover, firm specific human capital
Abstract: We use a unique data set on employee turnover by industry in Arizona to test
competing theories of turnover. We find that industries with lower establishment
survival rates have more employee turnover, even after controlling for differences
in the distribution of employee tenure. This result is consistent with a model of
turnover where employees choose how much firm specific human capital to accumulate,
but it is inconsistent with job matching models.
Full paper (165 KB PDF)
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Last update: August 11, 2003