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To maximize productivity, manufacturers must organize and equip their workforces to efficiently handle variable workloads. Their success depends on their ability to assign experienced and skilled workers to specialized tasks and coordinate work on production lines. Worker turnover may disrupt such efforts. We use staffing, productivity, and pay data from within a major consumer electronics manufacturer’s supply chain to study how firms should manage worker turnover and its effects using production decisions, wages, and inventory. We find that worker turnover impedes coordination between assembly line coworkers by weakening knowledge sharing and relationships. Publicly available unit-cost estimates imply that worker turnover accounts for $206–274 million in added direct expenses alone from defectively assembled units failing the firm’s stringent quality control. To evaluate managerial alternatives, we structurally estimate a dynamic equilibrium model (an Experience-Based Equilibrium) encompassing (1) workers’ endogenous turnover decisions and (2) the firm’s weekly planning of its production scheduling and staffing in response. In counterfactual analyses, a less turnover-prone, hence more productive, workforce significantly benefits the firm, reducing its variable production costs by 4.5%, or an estimated $928 million for the studied product. Such benefits justify paying higher efficiency wages even to less skilled workforces; furthermore, interestingly, rational inventory management policies incentivize self-interested firms to reduce rather than tolerate turnover. This paper was accepted by Vishal Gaur, operations management. Funding: The authors gratefully acknowledge support from the data sponsor, and K. Moon gratefully acknowledges support from the Wharton Dean’s Research Fund and the Claude Marion Endowed Faculty Scholar Award of the Wharton School. Supplemental Material: The online appendices are available at https://doi.org/10.1287/mnsc.2022.4476 .

The dominant approach to the study of international political economy assumes that the policy preferences of individuals and groups reflect economic self-interest. Recent research has called this assumption into question by suggesting that voters do not have economically self-interested preferences about trade policy. We investigate one potential explanation for this puzzling finding: economic ignorance. We show that most voters do not understand the economic consequences of protectionism. We then use experiments to study how voters would respond if they had more information about how trade barriers affect the distribution of income. We find that distributional cues generate two opposing effects: they make people more likely to express self-serving policy preferences, but they also make people more sensitive to the interests of others. In our study both reactions were evident, but selfish responses outweighed altruistic ones. Thus, if people knew more about the distributional effects of trade, the correlation between personal interests and policy preferences would tighten. By showing how the explanatory power of economic self-interest depends on beliefs about causality, this research provides a foundation for more realistic, behaviorally informed theories of international political economy.