Turnover and quality of employment in Brazil

ABSTRACT

Several recent studies have shown that the main Brazilian market problem seems to be its low job quality level rather than lack of job creation. This article gathers new evidences on this topic, mostly on labor turnover. In fact, Brazil displays the highest labor turnover in the world for comparable measures. The paper also studies how a high labor turnover can partially explain the low quality of jobs observed in Brazil. The theoretical argument is that labor productivity depends essentially on the level of human capital, either general - through basic education - or specific - through on-the-job training. Since a high labor turnover is a disincentive for training investment, it lowers specific human capital and, therefore, labor productivity. Finally, some labor market legislation changes are proposed aiming at reducing labor turnover and increasing labor quality.

KEYWORDS:
Labor turnover; human capital; productivity