Employee investment and screening based on labor force attachment
Journal
Economics Bulletin
Journal Volume
40
Journal Issue
2
ISSN
15452921
Date Issued
2020-01
Author(s)
Tanaka, Atsuko
Abstract
This paper studies firms' employee investment decisions based on labor force attachment under a screening model. We first characterize the conditions for pooling/separating equilibria and analyze the associated inefficiency. We find that strengthening the worker's labor force attachment does not always improve social welfare because it may lead to over-investment. The implications help us better understand the contributing factors to the gender wage gap since average job turnover rate is higher among women than men.
Publisher
Economics Bulletin
Type
journal article