Chapter

The Role of Fringe Benefits in Employer and Workforce Dynamics

Anja Decressin, Tomeka Hill, Kristin Mccue and Martha Stinson

in Producer Dynamics

Published by University of Chicago Press

Published in print March 2009 | ISBN: 9780226172569
Published online February 2013 | e-ISBN: 9780226172576 | DOI: http://dx.doi.org/10.7208/chicago/9780226172576.003.0014
The Role of Fringe Benefits in Employer and Workforce Dynamics

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This chapter explores the richness of the Longitudinal Employer-Household Dynamics (LEHD) data set by augmenting it with publicly-available data on employee benefits offered by different companies. It demonstrates that the level of benefits offered by a firm is negatively associated with employee turnover. Firms that offer benefits have higher-skilled workers and these skilled workers have lower turnover rates. Moreover, firms offering benefits have higher labor productivity and are more likely to survive, even after controlling for worker and firm characteristics and wage compensation. Benefits in general are negatively related to churning rates. Firms with high churning rates tend to grow more slowly. The firm wage effect has a strong positive relationship with growth rates. The results generally confirm that there is a correlation between a firm's decision to offer benefits and the mobility and productivity of its labor force as well as the firm's length of life.

Keywords: benefits; growth rates; employee turnover; firms; higher-skilled workers; labor productivity; wage compensation; churning rates

Chapter.  15326 words.  Illustrated.

Subjects: Microeconomics

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