Careers and Wages within Large Firms: Evidence from a Matched Employer-Employee Data Set

International Journal of Manpower, Vol. 24, No. 7, pp. 812-835, 2003

Posted: 4 Aug 2004

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

Abstract

The relationship between the workers' career and wages is studied using a longitudinal sample of firms. The analysis shows that the interactions of human capital attributes with the hierarchical levels are an important determinant of wages. The relationship between wage growth and several career events is characterized, namely, the effects of demotions and different types of promotions on wage paths. 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 employer learning and/or human capital accumulation effect at the bottom of the hierarchy and a stronger job assignment effect at the top.

Keywords: Hierarchy, careers, promotions, wages, learning, human capital

JEL Classification: J32, J33, M52

Suggested Citation

Lima, Francisco and Telhado Pereira, Pedro, Careers and Wages within Large Firms: Evidence from a Matched Employer-Employee Data Set. International Journal of Manpower, Vol. 24, No. 7, pp. 812-835, 2003. Available at SSRN: https://ssrn.com/abstract=572381

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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