The Labor Market Signaling Value of Promotions

42 Pages Posted: 2 Dec 2016 Last revised: 20 Aug 2017

See all articles by Bobak Moallemi

Bobak Moallemi

Stanford Graduate School of Business

Ramana Ramakrishnan

LinkedIn Corporation

Ryan Shyu

Stanford Graduate School of Business

Date Written: August 18, 2017

Abstract

Do firms learn from other firms' human resource allocation decisions? This paper studies this question in the context of worker promotions, which according to theory serve as informative signals to external employers under asymmetric learning about employee ability. Using variation in the timing of promotion reports on LinkedIn CVs, we implement a differences-in-differences strategy to demonstrate that online promotion reports increase recruiter-initiated worker contacts ("InMails"). The signaling impact of promotions is concentrated among those who have recently attracted previous recruiter interest; this effect is subsumed by firm and job heterogeneity, suggesting that factors idiosyncratic to individual users are less important relative to firm and job quality in providing labor market visibility.

JEL Classification: M51, D82, D83

Suggested Citation

Moallemi, Bobak and Ramakrishnan, Ramana and Shyu, Ryan, The Labor Market Signaling Value of Promotions (August 18, 2017). Available at SSRN: https://ssrn.com/abstract=2879106 or http://dx.doi.org/10.2139/ssrn.2879106

Bobak Moallemi

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Ramana Ramakrishnan

LinkedIn Corporation ( email )

2029 Stierlin Ct
Mountain View, CA
United States

Ryan Shyu (Contact Author)

Stanford Graduate School of Business ( email )

Stanford, CA
United States

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