Abstract

Several recent studies have shown that the main Brazilian market problem seems
to be its low job quality level rather than lack of job creation. This article gathers new
evidences on this topic, mostly on labor turnover. In fact, Brazil displays the highest labor
turnover in the world for comparable measures. The paper also studies how a high labor
turnover can partially explain the low quality of jobs observed in Brazil. The theoretical
argument is that labor productivity depends essentially on the level of human capital, either
general – through basic education – or specific – through on-the-job training. Since a high
labor turnover is a disincentive for training investment, it lowers specific human capital and,
therefore, labor productivity. Finally, some labor market legislation changes are proposed
aiming at reducing labor turnover and increasing labor quality.

JEL Classification: J63; J24.