I Used to Work at Goldman Sachs! How Firms Benefit from Organizational Status in the Market for Human Capital

Strategic Management Journal, Forthcoming

21 Pages Posted: 23 May 2014

See all articles by Matthew J. Bidwell

Matthew J. Bidwell

University of Pennsylvania - Management Department

Shinjae Won

University of Pennsylvania - Management Department

Roxana Barbulescu

McGill University

Ethan R. Mollick

University of Pennsylvania - Wharton School

Date Written: May 21, 2014

Abstract

How does employer status benefit firms in the market for general human capital? On the one hand, high status employers are better able to attract workers, who value the signal of ability that employment at those firms provides. On the other hand, that same signal can help workers bid up wages and capture the value of employers’ status. Exploring this tension, we argue that high status firms are able to hire higher ability workers than other firms, and do not need to pay them the full value of their ability early in the career, but must raise wages more rapidly than other firms as those workers accrue experience. We test our arguments using unique survey data on careers in investment banking.

Keywords: human capital, status, banking, human resources, hiring, recruiting, signalling

JEL Classification: J4, J3, J6

Suggested Citation

Bidwell, Matthew J. and Won, Shinjae and Barbulescu, Roxana and Mollick, Ethan R., I Used to Work at Goldman Sachs! How Firms Benefit from Organizational Status in the Market for Human Capital (May 21, 2014). Strategic Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2440404

Matthew J. Bidwell (Contact Author)

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

Shinjae Won

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

Roxana Barbulescu

McGill University ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada

Ethan R. Mollick

University of Pennsylvania - Wharton School ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

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