Institutional Affiliation: University of California at Santa Barbara
NBER Working Papers and Publications
|August 2019||How Costly is Turnover? Evidence from Retail|
with Peter J. Kuhn: w26179
Identifying the causal effects of turnover on organizational productivity is challenging, due to data constraints and endogeneity issues. We address these challenges by using day-to-day variation in the composition and performance of small retail sales teams, and by exploiting an advance notice requirement for quits. We find robust and statistically significant productivity losses at four distinct times during the departure process: after the worker gives notice, before she departs, after she leaves, and after a new worker starts. We attribute the first two effects to a combination of recruitment activities by incumbent workers and reductions in morale, and the last two to short-staffing and on-boarding costs. Almost two thirds (63 percent) of these productivity losses occur before the d...