Monkey Bars and Ladders: The Importance of Lateral and Vertical Job Mobility in Internal Labor Market Careers

76 Pages Posted: 7 Oct 2003

See all articles by Thomas J. Dohmen

Thomas J. Dohmen

Institute for the Study of Labor (IZA); Maastricht University - Business Investment Research Center (BIRC)

Ben Kriechel

Maastricht University - Research Centre for Education and the Labour Market (ROA); IZA Institute of Labor Economics

Gerard A. Pfann

Maastricht University; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Date Written: August 2003

Abstract

The research area of the new economics of personnel has a short but important and insightful history. Theory ahead of measurement asks for testing newly developed human resource concepts. These tests often need detailed firm-specific data. Repetition and comparison of results is key in finding out what holds true in general and what marks idiosyncrasy. In this paper, we compare results from the existing literature with the outcomes from analyzing personnel data of the Dutch aircraft manufacturer Fokker during the period January 1, 1987, the day the company started with their electronic personnel filing system, until March 15, 1996, the day the company filed for bankruptcy. We shed light on differences in the functioning of internal labor markets during periods of workforce growth and decline. We find multiple ports of entry that are concentrated in low blue and white-collar levels. New entrants are younger and have higher educational levels than incumbent workers who are promoted to similar jobs. Despite substantial variation in individual wages, careers are important as wages are strongly related to job levels. Promotion rates fall and demotion rates rise when the firm enters the stage of demise. Job-rotation improves promotion chances, stimulates wage growth, and reduces the lay-off risk.

Keywords: internal labor markets, human resource management, personnel economics

JEL Classification: J31, J41, J63

Suggested Citation

Dohmen, Thomas and Kriechel, Ben and Pfann, Gerard Antonie, Monkey Bars and Ladders: The Importance of Lateral and Vertical Job Mobility in Internal Labor Market Careers (August 2003). IZA Discussion Paper No. 867. Available at SSRN: https://ssrn.com/abstract=446281

Thomas Dohmen (Contact Author)

Institute for the Study of Labor (IZA) ( email )

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

Maastricht University - Business Investment Research Center (BIRC) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-388 3832 (Phone)
+31-43-388 4856 (Fax)

Ben Kriechel

Maastricht University - Research Centre for Education and the Labour Market (ROA) ( email )

P.O. Box 616
Maastricht, MD6200
Netherlands

IZA Institute of Labor Economics

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

Gerard Antonie Pfann

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-388 3832 (Phone)
+31-43-388 4856 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for the Study of Labor (IZA) ( email )

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

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