A Hicksian Model of Labour Turnover and Local Wage Determination
- 1 May 1981
- journal article
- research article
- Published by SAGE Publications in Environment and Planning A: Economy and Space
- Vol. 13 (5), 563-574
- https://doi.org/10.1068/a130563
Abstract
Employers have a variety of reasons for attempting to stabilize turnover in their labour force. For example, specific skill requirements, the added costs of training inherent in hiring new workers, and the absolute demand for labour may stimulate firms to minimize labour turnover. One way of reducing turnover is for the individual firm to raise its wage rates. However, depending upon the relative tightness of the local labour market (reflected in the rates of hiring and unemployment), this could result in widespread wage competition amongst employers and general increases in the aggregate local wage rate. The significance of quits, hires, and unemployment are explored, in an attempt to explain differential urban wage inflation in the United States. Emphasis is placed on Hicks's model of labour turnover which emphasizes the firm's management of its labour needs. This model is analysed in a time-series framework over the period 1970–1979; a decade of rapid inflation and general stagnation in the United States.Keywords
This publication has 9 references indexed in Scilit:
- Modeling out-Migration from Depressed Regions: The Significance of Origin and Destination CharacteristicsEnvironment and Planning A: Economy and Space, 1980
- LOCAL LABOR MARKET DYNAMICS AND THE DETERMINANTS OF QUITS AND LAYOFFSUrban Geography, 1980
- Selecting the Optimal Order of Polynomial in the Almon Distributed LagThe Review of Economics and Statistics, 1974
- Wages and Employment under Uncertain DemandThe Review of Economic Studies, 1974
- Wage-rate change in Urban labor markets and intermarket linkagesPapers in Regional Science, 1973
- Wage Inflation and the Structure of Regional UnemploymentJournal of Money, Credit and Banking, 1973
- Unemployment Dispersion as a Determinant of Wage Inflation in the U.K. 1925-66The Manchester School, 1971
- Economics of Information and Job SearchThe Quarterly Journal of Economics, 1970
- The Distributed Lag Between Capital Appropriations and ExpendituresEconometrica, 1965