Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/308105 
Year of Publication: 
2025
Series/Report no.: 
GLO Discussion Paper No. 1549
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
Labour turnover is a crucial element of contemporary economic life. It can improve productivity if more productive workers replace less productive ones. However, in the short run, it generates sizeable labour adjustment costs (LACs), including productivity losses. This paper sheds new light on the turnover-productivity relationship focusing on productivity LACs. We use firm-level 2014-2022 Belgian data with information on stayers, new hires and leavers: those who are fired, those leaving voluntarily, and those who are about to retire. We use the Hellerstein-Neumark (HN) framework to quantify the productivity of these different labour types, using stayers as a benchmark. We posit that evidence of significant productivity handicaps is a good indicator of productivity LACs. Results suggest no productivity LACs for new hires. By contrast, for leavers, they point to significant ones. What is more, findings for prospective (early) retirees indicate a very sizeable drop in productivity during their last year of employment.
Subjects: 
Labour Turnover
Labour Adjustment Costs
Labour Productivity Differences
Prospective Retirees
Short Horizon
JEL: 
J24
J63
J26
Document Type: 
Working Paper

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