Careers and Wage Growth within Large Firms

50 Pages Posted: 20 Aug 2001

See all articles by Francisco Lima

Francisco Lima

Instituto Superior Técnico (IST) - Department of Engineering and Management; Center for Management Studies (CEG-IST); Statistics Portugal

Pedro Telhado Pereira

Universidade da Madeira - Gestao e Economica; IZA Institute of Labor Economics

Date Written: July 2001

Abstract

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.

Keywords: Careers, Promotions, Wage Growth

JEL Classification: J32, J33, M12

Suggested Citation

Lima, Francisco and Telhado Pereira, Pedro, Careers and Wage Growth within Large Firms (July 2001). IZA Discussion Paper No. 336. Available at SSRN: https://ssrn.com/abstract=278528

Francisco Lima (Contact Author)

Instituto Superior Técnico (IST) - Department of Engineering and Management ( email )

Av. Rovisco Pais
Lisbon, Lisbon 1049-001
Portugal

HOME PAGE: http://https://fenix.ist.utl.pt/homepage/ist14367

Center for Management Studies (CEG-IST) ( email )

Lisbon
Portugal

Statistics Portugal ( email )

Portugal

Pedro Telhado Pereira

Universidade da Madeira - Gestao e Economica ( email )

Campus Universitario da Penteada
9000-390 Funchal
Portugal
351 291 70 50 40 (Phone)
351 291 70 50 43 (Fax)

HOME PAGE: http://www.uma.pt/Privado/ppereira

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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