Ragan, James F. Jr., and Sharon P. Smith. 1981. "The Impact of Differences in Turnover Rates on Male/Female Pay Differentials." Journal of Human Resources 16(3):343-365.

Economic theory suggests that wages vary with turnover rates. Because of hiring and training costs, workers viewed as likely to quit can anticipate a wage discount. Workers in industries with high layoff rates may demand a compensating wage premium. By pooling time-series industry turnover rates, by sex, with 1970 Census data, we are able to examine the effect of past industry turnover on current earnings. Turnover proves to be important for both males and females, although the wage discount for a high quit probability is larger for females. When differences in turnover are taken into account, the portion of the male/female earnings gap "explainable" by human capital and socioeconomic variables increases by a factor of one-half.

The authors are, respectively, Assistant Professor of Economics, Kansas State University, and Economist, Domestic Research Department, Federal Reserve Bank of New York.
* The authors would like to thank Krishna Akkina, Gary Fields, Carl Gambs, William Melton, William Reece, V. Kerry Smith, Steven Zell, two anonymous referees, and the editor for their valuable comments and suggestions, and Christopher Kell and Constance Cirrincione for computational assistance. An earlier version of this paper was presented at the December 1977 AEA Meetings. This paper represents the opinions of the authors and not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System.

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