The Effect of Relative Wages and External Shocks on Public Sector Turnover*

Abstract

We use a unique database to investigate the determinants of quits and terminations amongst public servants where relative wages, job status and external shocks are used as explanatory variables. It is shown that in comparison with others in the public sector, nurses and teachers on permanent contracts are more likely to quit. More generally, both relative wages and external shocks are found to be an important determinant of turnover behaviour. The public policy implications of these findings are discussed.

Voice Effects of Public Sector Unions on Turnover

“…Another factor affecting employee turnover is the economic factor in the labor market. Employees are clearly exposed to events in the external labor market such as local unemployment rate (Bradley, Green, & Mangan, 2012, p. 248). Many empirical studies have shown that when unemployment rate increases, people are less likely to quit (Selden & Moynihan, 2000).…”

Dark Half: Decentralized Bargaining and Well-Being at Work

“…Higher relative wages or wage dispersion are linked with lower job satisfaction (Shaw 2014) and increased sickness absence (Mahy, Rycx and Volral 2015). Wage dispersion also enhances job-quitting behavior (Haltiwanger and Vodopivec 2003, Riddell 2011, Bradley, Green and Mangan 2012. 7 For example, a one-log-point change in dispersion (~1.5 standard deviation from the mean) increases quit rates by approximately 20 percent in Canada (Riddel 2011).…”

“…First, decentralization is related to higher earnings (e.g., Card and de la Rica 2006, Plasman, Rusinek andRycx 2007, Dahl, le Maire andMunch 2013), and higher earnings are related to improved mental health (Reeves, McKee and Mackenbach 2017), worker effort (Charness and Kuhn 2007), and job satisfaction (Clark, Kristensen and Westergård-Nielsen 2009). Second, decentralized bargaining can affect wage dispersion, which is found to be an important determinant of job quitting behavior (Riddell 2011, Bradley, Green andMangan 2012), work absenteeism (Pfeifer 2010), and job satisfaction (Card et al 2012). Third, , actual or relative wages, toward a more egalitarian wage policy might affect their well-being at work.…”

Ewolucja i ewaluacja polityki rynku pracy w Polsce

“…Połączenie tych procesów w konsekwencji oddziałuje na parametry rynku pracy i całej gospodarki, a modelowe osadzenie elementów polityki państwa umożliwia identyfikację i ustalenie siły wpływu poszczególnych parametrów na stan gospodarki (np. Bradley, Green 2012). Ostatecznie warto również dodać, że najnowsze badania empiryczne, które wykorzystują modele oparte na teorii poszukiwań na rynku pracy w celu ewaluacji polityki rynku pracy, udowadniają, że jest to doskonałe i rozwojowe środowisko do prowadzenia tego typu analiz (np.…”