When Values Align: Corporate Philanthropy and Employee Turnover
69 Pages Posted: 29 Jul 2022 Last revised: 26 Jan 2024
Date Written: February 27, 2022
Abstract
We study how corporate philanthropy affects employee retention and productivity, using comprehensive resume data from a popular professional networking website. Using large natural disasters as shocks to the demand for disaster relief to identify exogenous variation in corporate charitable giving, we show that corporate philanthropy significantly reduces employee turnover by 5.9% to 7.8%. The effect is distinct from other CSR activities, and more pronounced for employees with volunteering experience and for female and younger employees, even within the same firm and year. Our findings indicate that an alignment in values between workers and firms can increase employee commitment.
Keywords: CSR, Philanthropy, Employee Retention, Labor Supply, Human Capital
JEL Classification: J22, J24, J28
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