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    Employee Turnover: Less is Not Necessarily More?

    Access Status
    Fulltext not available
    Authors
    Harris, Mark
    Tang, K.
    Tseng, Y.-P.
    Date
    2006
    Type
    Book Chapter
    
    Metadata
    Show full item record
    Source Title
    Panel Data Econometrics: Theoretical Contributions and Empirical Applications
    DOI
    10.1016/S0573-8555(06)74013-5
    ISBN
    0444521720
    9780444521729
    Faculty
    Faculty of Business and Law
    School
    School of Economics, Finance and Property
    URI
    http://hdl.handle.net/20.500.11937/81799
    Collection
    • Curtin Research Publications
    Abstract

    Theoretical studies have suggested firm specific human capital and job matching as the major, but opposite, mechanisms through which employee turnover affects labour productivity. This study finds that the former dominates when turnover is high, while the latter dominates when turnover is low. The optimal turnover rate that maximises productivity is about 0.22 per annum. Bringing the observed turnover rates in the sample to the optimal level increases the average productivity by 1.1 per cent. The large gap between the observed and the optimal rate could be explained by the lack of decision coordination between agents in labour markets.

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