By reducing labor turnover, unions may increase productivity because a lower turnover rate
A) results in a less-experienced workforce.
B) increases the incentive for firms to provide training to their workers.
C) allows firms to employ a greater number of younger, more energetic workers.
D) increases the incentive for firms to substitute labor for capital in the production process.

Question

Quizplus · Accepted Answer

When there is a lower turnover rate, firms are more likely to invest in training workers because they know that the workers will stick around long enough to make the investment worth it. This increased training generally leads to increased productivity.

By Reducing Labor Turnover, Unions May Increase Productivity Because a Lower