Long-Term Employment and Complementary Human Resource Management Practices

This paper identifies human resource management practices that we hypothesize will raise the return to and, hence, complement
long-term-employment (LTE) contracts. Compared to firms that do not offer LTE contracts, we find that firms offering LTE contracts
make greater use of a wide array of the hypothesized complementary practices relating to training, compensation, information-sharing,
job design, employee-customer interactions, and responses to declines in the demand for labor. Additionally, we provide evidence
of complementarities between LTE contracts and above average use of the hypothesized complementary practices in their effects
on quit rates, an inverse proxy for employees’ reciprocal commitment to LTE.