The more intra-firm equity, the higher employee retention: Evidence from the universe of urban firms in Colombia/A mayor equidad en las empresas, mayor retención del personal: Evidencia del universo de empresas urbanas en Colombia/Mais equidade nas empresas, maior retenção de pessoal: evidências do universo das empresas urbanas na Colômbia

• Published in: Estudios gerenciales Vol. 39; no. 168; p. 327
• Main Author: Lora, Eduardo
• Format: Journal Article
• Language: Spanish
• Published: Universidad ICESI 01.07.2023
• Subjects: Employee retention; Employee turnover
• DOI: 10.18046/j.estger.2023.168.5897
• ISSN: 0123-5923

Fairness and equity considerations may influence workers' decision to stay or quit their jobs. This paper tests several hypotheses derived from theory on the relation between intra-firm equity and employee retention. It uses administrative data covering the universe of urban firms in Colombia between 2008 and 2016. The average wage of the firm, the intra-firm dispersion of real wage adjustments, and the share of women in the firm are significantly associated with retention rates in the directions predicted by theory. The intra-firm wage gap is directly associated with retention, at odds with theory. The results suggest that equity considerations are important in employees' decision to stay or quit.