How Responsive are Quits to Benefits?

Economists have argued that one function of fringe benefits is to reduce turnover. However, the effect on quits of the marginal dollar of benefits relative to wages is underresearched. We use the benefit incidence data in the 1979 National Longitudinal Survey of Youth and the cost information in the National Compensation Survey to impute benefit costs and estimate quit regressions. The quit rate is much more responsive to benefits than to wages, and total turnover even more so; benefit costs are also correlated with training provision. We cannot disentangle the effects of individual benefits due to their high correlation.