Establishment Size and Job Tenure

Industrial Relations. Fall 86, Vol. 25 Issue 3, p 292-302. 11p.

Posted: 29 Jan 2014

See all articles by James B. Rebitzer

James B. Rebitzer

Boston University School of Management; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; Bard College - The Levy Economics Institute

Date Written: Fall 1986

Abstract

A central hypothesis of the theory of labor market segmentation is that large establishments tend to establish circumstances of employment which foster employment stability. According to this view, large employers stabilize their labor relations by instituting job ladders, grievance procedures, and seniority provisions governing pay, promotion, layoffs, and recalls (see Edwards, 1979; Gordon et al., 1982). These structures, often referred to as internal labor markets, are understood to be key institutional underpinnings of labor market segmentation (see Doeringer and Piore, 1971). This paper tests the supposed relationship between large employers and employment stability by focusing on the effect of plant size and firm size on job tenure. Previous econometric studies of the determinants of job tenure have looked closely at such factors as unionization, hourly earnings, and fringe benefits, but they have ignored the effect of the size of the establishment (Freeman, 1980a,b; Freeman and Medoff, 1984; Leigh, 1970; Merrilees, 1981). Recent studies of individual quit decisions and turnover experience have also overlooked employer size (e.g., Steinberg, 1975; Blau and Kahn, 1981, 1983; Mitchell, 1982; Schiller and Weiss, 1979).

Suggested Citation

Rebitzer, James B., Establishment Size and Job Tenure (Fall 1986). Industrial Relations. Fall 86, Vol. 25 Issue 3, p 292-302. 11p.. Available at SSRN: https://ssrn.com/abstract=2386773

James B. Rebitzer (Contact Author)

Boston University School of Management ( email )

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Boston, MA MA 02215
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617 353 4605 (Phone)

National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

P.O. Box 7240
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Germany

Bard College - The Levy Economics Institute

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United States

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