An Inverse Gaussian Model for Labour Turnover

Abstract

SUMMARY A Wiener process with drift is presented as a model of employee job attachment. The model implies a defective inverse Gaussian distribution form for employee service times. The inverse Gaussian form is fitted to some published employee-service data with encouraging results. The model's contribution to our understanding of occupational variables and employment experience is discussed. It is shown that the model provides a useful basis for formulating and testing hypotheses about labour turnover phenomena. Although the primary emphasis is on the statistical aspects of the subject, some practical implications for the personnel and labour fields are considered.