Explaining Labour Turnover: Empirical Evidence from UK Establishments

Abstract. This paper investigates the determinants of labour turnover using establishment‐level survey data for the UK. The main contribution of our paper is that it estimates the impact of wages, unionization, training and other aspects of working conditions on labour turnover. Our main findings are: (i) turnover is inversely related to the relative wage; (ii) unionism reduces turnover: this is due mainly to the ability of unions to improve conditions of work rather than the voice‐exit model of Freeman; (iii) there is a complex relationship between turnover and training; and (iv) turnover is lower in the ‘high‐tech’ sector.