Labour Turnover, Wage Structure, and Natural Unemployment

Abstract

A firm may reduce its turnover and the entailed turnover costs by raising wages. A rise in unemployment reduces turnover and turnover costs in a similar way. The interaction of these effects leads - in presence of perfectly flexible wages - to a stable equilibrium in the labor market which clears the market but accidentally. Unemployment increases with increases in labor mobility. Wage differentials arise between perfectly identical workers working in different firms that face different turnover costs.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 78 citations exist upstream.