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Oliver Stettes IW-Trends No. 4 25. December 2011 Labour Turnover

Macroeconomic Evidence and Individual Determinants

Labour Turnover
Oliver Stettes IW-Trends No. 4 25. December 2011

Labour Turnover

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German Economic Institute German Economic Institute

Macroeconomic Evidence and Individual Determinants

The labour turnover rate in Germany has recently ranged between 25 and 30 percent. While the turnover rate does not indicate a higher mobility in comparison with previous decades, the development of the churning rate suggests that mobility may have increased since 2006. In general, the employment turnover of older workers is lower. This does not only apply to interfirm mobility, but also to the re-entry into the labor force. Econometric evidence suggests that a growing reservation wage may be detrimental to the incentives particularly of older workers to resume work after a period of non-employment. In addition, the likelihood of a job change even among older workers increases as job satisfaction declines. Finally, the impact of both the level of acquired skills and that of required competences on the likelihood of a job change attenuates with growing age.

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