Career Spillovers in Internal Labor Markets

66 Pages Posted: 26 Oct 2019

See all articles by Nicola Bianchi

Nicola Bianchi

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER)

Giulia Bovini

London School of Economics & Political Science (LSE) - Department of Economics

Jin Li

HKU SPACE Community College

Matteo Paradisi

Harvard University

Michael Powell

Northwestern University - Kellogg School of Management

Date Written: August 12, 2019

Abstract

This paper studies career spillovers across workers, which arise in firms with limited promotion opportunities. We exploit a 2011 Italian pension reform that unexpectedly tightened eligibility criteria for the public pension, leading to sudden, substantial, and heterogeneous retirement delays. We use administrative data on Italian private-sector workers. The analysis leverages cross-firm variation to isolate the effect of retirement delays among soon-to-retire workers on the wage growth and promotions of their colleagues. We find evidence of spillover patterns consistent with older workers blocking the careers of their younger colleagues. These effects are present only in firms with limited promotion opportunities.

Keywords: wage growth, promotions, internal labor markets, pension reform

JEL Classification: M51, M52, J21, J26, J31

Suggested Citation

Bianchi, Nicola and Bovini, Giulia and Li, Jin and Paradisi, Matteo and Powell, Michael, Career Spillovers in Internal Labor Markets (August 12, 2019). Available at SSRN: https://ssrn.com/abstract=3470761 or http://dx.doi.org/10.2139/ssrn.3470761

Nicola Bianchi (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2211 Campus Drive
Evanston, IL 60208
United States

HOME PAGE: http://www.bianchinicola.com

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Giulia Bovini

London School of Economics & Political Science (LSE) - Department of Economics ( email )

London WC2A 2AE
United Kingdom

Jin Li

HKU SPACE Community College ( email )

28 Wang Hoi Road Kowloon Bay
Kowloon
Hong Kong

Matteo Paradisi

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Michael Powell

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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