Turnover is job change — workers changing firms and firms shedding and hiring workers. Turnover is sometimes seen as an indicator of the dynamism of the economy, since without turnover, labor cannot get reallocated from less-productive to more-productive uses. Indeed, voluntary job change usually results in gains to the worker. Involuntary job loss also imposes costs on workers, however, particularly on low-wage workers who are least likely to be able to bear the cost of being without work.
In the subsequent sections, we discuss the impact on turnover on low-wage workers in more detail. We begin by describing turnover in more detail, examining why it occurs, and then discuss its pervasiveness. We then describe the consequences of turnover, particularly in the low-wage labor market, and evaluate potential policy recommendations.