Specificity of Human Capital and Promotions

Abstract:     
This paper analyzes firms’ hiring and promotion patterns in each job rank within firms, and infers the relative significance of firm- and occupation-specific human capital. The results suggest that firm- and occupation-specific skills are equally valuable for tasks in each job rank, and that the significance of each increases with job rank, but that there exists a large amount of heterogeneity across occupations. This paper also shows that the lengths of firm- and occupation-tenure are very noisy measures of firm- and occupation-specific human capital, and contrasts our results with those from other recent studies on the returns of firm- and occupation-tenure.

Number of Pages in PDF File: 49

Keywords: Specific Human Capital, Promotion, Hiring

JEL Classification: M51, J62

working papers series