Does Worker Turnover Improve Productivity Growth?
Pekka Ilmakunnas (),
Mika Maliranta () and
No 320, Working Papers from Tampere University, School of Management and Business, Economics
We examine the relationship between worker turnover and total factor productivity growth using a matched worker-plant data from Finnish manufacturing. The total turnover rate (sum of hiring and separation rates) is negatively, whereas inflow of new workers is positively, and outflow of workers negatively associated with productivity growth. This is consistent with general human capital. Excess worker turnover or churning that measures separations that lead to replacement hiring speeds up productivity growth. This indicates that worker turnover leads to better matches of available jobs and potential employees and therefore to higher productivity.
Keywords: worker turnover; total factor productivity; linked employer-employee data (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:tam:wpaper:0320
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