Careers and wage growth within large firms
The relationship between the worker's career path and wage growth is studied using a longitudinal sample of large firms. The econometric analysis shows that promoted workers receive a positive wage premium even if they stay in the same job level. Demotions are associated with negative wage premiums. The wage-career dynamics generates a U-shape to the wage premiums for promotions over the hierarchical ladder. In the context of the model discussed, this shape suggests a stronger learning and/or human capital accumulation effect at the bottom of the hierarchy and a stronger job assignment effect at the top.
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asymmetric information Brunello capital accumulation effect career path career progression Comparative Advantage consecutive data appendix Dependent variable difference in log disaggregated career effects Econometric Analysis employee-year equation estimation F statistic firm included first-differences in tenure Francisco Lima globally significant hierarchy hours and log human capital accumulation include first-differences innate ability job assignment effect job ladder Journal of Economics Journal of Labor Labor Economics Labor Market large firms learning effect log hours log number log real wage lower job level lower levels Move to lower Move to upper multiplied by 100 negative wage premiums Number of observations number of transitions number of workers positive wage premium premiums for promotions promoted workers promotion Move real wage premium sample Standard deviation Summary statistics Table Telhado Pereira tenure squared Total number Tournament Theory U-shape upper job levels upper levels Values multiplied wage growth wage increases worker's career workers employed workers in Level