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Labor market power and worker turnover

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  • Kali, Raja
  • Liu, Andrew Yizhou

Abstract

The last two decades have seen a significant decrease in labor market turnover and an increase in labor market concentration. We investigate whether labor market power, as manifested by employer concentration and outside options, affect turnover rates. Utilizing online vacancy posting data, we find that moving from the 25th percentile to 75th percentile of employer concentration reduces the turnover rate by 5%, driven by high-school workers in low-skill industries. The same exercise for outside options implies a 39% increase in the turnover rate, driven by workers in high-skill industries.

Suggested Citation

  • Kali, Raja & Liu, Andrew Yizhou, 2024. "Labor market power and worker turnover," European Economic Review, Elsevier, vol. 163(C).
    • Handle: RePEc:eee:eecrev:v:163:y:2024:i:c:s0014292124000308
    DOI: 10.1016/j.euroecorev.2024.104701
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    More about this item

    Keywords

    Labor market power; Turnover rate; Employer concentration; Outside options;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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