IDEAS home Printed from https://ideas.repec.org/a/bla/ozechr/v49y2009i2p107-137.html
   My bibliography  Save this article

Internal Labour Markets: Evidence From Two Large Australian Employers

Author

Listed:
  • Andrew Seltzer
  • André Sammartino

Abstract

This paper examines internal labour markets in the late nineteenth and early twentieth century using personnel records from the Union Bank of Australia and the Victorian Railways. Both employers hired young workers and offered them the possibility of very‐long‐term employment. Salaries were determined by impersonal rules, such as being attached to tenure and to position. Workers rarely received nominal pay cuts. This approach to human resources was designed to retain and motivate workers. We show that all of the classic features of internal labour markets used to describe American firms in the 1970s were present dating back to the Victorian period.

Suggested Citation

  • Andrew Seltzer & André Sammartino, 2009. "Internal Labour Markets: Evidence From Two Large Australian Employers," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 49(2), pages 107-137, July.
    • Handle: RePEc:bla:ozechr:v:49:y:2009:i:2:p:107-137
    DOI: 10.1111/j.1467-8446.2009.00252.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-8446.2009.00252.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-8446.2009.00252.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rosen, Sherwin, 1988. "Transactions Costs and Internal Labor Markets," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 49-64, Spring.
    2. Williamson Jeffrey G., 1995. "The Evolution of Global Labor Markets since 1830: Background Evidence and Hypotheses," Explorations in Economic History, Elsevier, vol. 32(2), pages 141-196, April.
    3. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    4. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 921-955.
    5. Seltzer, Andrew J. & Simons, Kenneth L., 2001. "Salaries and Career Opportunities in the Banking Industry: Evidence from the Personnel Records of the Union Bank of Australia," Explorations in Economic History, Elsevier, vol. 38(2), pages 195-224, April.
    6. McLean, Ian W., 2007. "Why was Australia so rich?," Explorations in Economic History, Elsevier, vol. 44(4), pages 635-656, October.
    7. Fehr, Ernst & Goette, Lorenz, 2005. "Robustness and real consequences of nominal wage rigidity," Journal of Monetary Economics, Elsevier, vol. 52(4), pages 779-804, May.
    8. Rosen, Sherwin, 1986. "Prizes and Incentives in Elimination Tournaments," American Economic Review, American Economic Association, vol. 76(4), pages 701-715, September.
    9. Hamilton, Barton & MacKinnon, Mary, 1996. "Quits and Layoffs in Early Twentieth Century Labor Markets," Explorations in Economic History, Elsevier, vol. 33(3), pages 346-366, July.
    10. Sundstrom, William A., 1988. "Internal labor markets before World War I: On-the-job training and employee promotion," Explorations in Economic History, Elsevier, vol. 25(4), pages 424-445, October.
    11. Seltzer, Andrew & Merrett, David T, 2000. "Personnel Policies at the Union Bank of Australia: Evidence from the 1888-1900 Entry Cohorts," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 573-613, October.
    12. Huberman, Michael, 2004. "Working Hours of the World Unite? New International Evidence of Worktime, 1870–1913," The Journal of Economic History, Cambridge University Press, vol. 64(4), pages 964-1001, December.
    13. Fleming,Grant & Merrett,David & Ville,Simon, 2006. "The Big End of Town," Cambridge Books, Cambridge University Press, number 9780521689908.
    14. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    15. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    16. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
    17. H. M. Boot, 1991. "Salaries and career earnings in the Bank of Scotland, 1730-1880," Economic History Review, Economic History Society, vol. 44(4), pages 629-653, November.
    18. Peter Howlett, 2000. "Evidence of the Existence of an Internal Labour Market in the Great Eastern Railway Company, 1875-1905," Business History, Taylor & Francis Journals, vol. 42(1), pages 21-40.
    19. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 881-919.
    20. Carter, Susan B. & Savoca, Elizabeth, 1990. "Labor Mobility and Lengthy Jobs in Nineteenth-Century America," The Journal of Economic History, Cambridge University Press, vol. 50(1), pages 1-16, March.
    21. Peter Howlett, 2004. "The internal labour dynamics of the Great Eastern Railway Company, 1870–1913," Economic History Review, Economic History Society, vol. 57(2), pages 396-422, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Charles Fahey & André Sammartino, 2013. "Work and Wages at a Melbourne Factory, the Guest Biscuit Works 1870–1921," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 53(1), pages 22-46, March.
    2. Dmytro Ostapenko & Diane Kirkby, 2022. "‘Australian sailors wanted’: Labour supply and Australian shipping, c. 1870–c. 1914," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 62(2), pages 141-160, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dohmen, Thomas J., 2004. "Performance, seniority, and wages: formal salary systems and individual earnings profiles," Labour Economics, Elsevier, vol. 11(6), pages 741-763, December.
    2. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    3. Daniel J. Benjamin, 2015. "A Theory of Fairness in Labour Markets," The Japanese Economic Review, Japanese Economic Association, vol. 66(2), pages 182-225, June.
    4. Jed DeVaro & Michael Waldman, 2012. "The Signaling Role of Promotions: Further Theory and Empirical Evidence," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 91-147.
    5. C. Sofia Machado & Miguel Portela, 2011. "Age and opportunities for promotion," NIPE Working Papers 03/2011, NIPE - Universidade do Minho.
    6. Grund, Christian, 2002. "The Wage Policy of Firms: Comparative Evidence for the U.S. and Germany from Personnel Data," Bonn Econ Discussion Papers 30/2002, University of Bonn, Bonn Graduate School of Economics (BGSE).
    7. Seltzer, Andrew J. & Simons, Kenneth L., 2001. "Salaries and Career Opportunities in the Banking Industry: Evidence from the Personnel Records of the Union Bank of Australia," Explorations in Economic History, Elsevier, vol. 38(2), pages 195-224, April.
    8. Paul Hek & Daniel Vuuren, 2011. "Are older workers overpaid? A literature review," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(4), pages 436-460, August.
    9. Seltzer, Andrew & Merrett, David T, 2000. "Personnel Policies at the Union Bank of Australia: Evidence from the 1888-1900 Entry Cohorts," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 573-613, October.
    10. Peter Howlett, 2004. "The internal labour dynamics of the Great Eastern Railway Company, 1870–1913," Economic History Review, Economic History Society, vol. 57(2), pages 396-422, May.
    11. Ghosh, Suman, 2007. "Job mobility and careers in firms," Labour Economics, Elsevier, vol. 14(3), pages 603-621, June.
    12. Tom Coupé & Valérie Smeets & Frédéric Warzynski, 2006. "Incentives, Sorting and Productivity along the Career: Evidence from a Sample of Top Economists," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(1), pages 137-167, April.
    13. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883, December.
    14. Catherine Haeck & Frank Verboven, 2012. "The Internal Economics of a University: Evidence from Personnel Data," Journal of Labor Economics, University of Chicago Press, vol. 30(3), pages 591-626.
    15. Christian Belzil & Michael Bognanno, 2008. "Promotions, Demotions, Halo Effects, and the Earnings Dynamics of American Executives," Journal of Labor Economics, University of Chicago Press, vol. 26(2), pages 287-310, April.
    16. Seltzer, Andrew, 2010. "Did firms cut nominal wages in a deflationary environment?: Micro-level evidence from the late 19th and early 20th century banking industry," Explorations in Economic History, Elsevier, vol. 47(1), pages 112-125, January.
    17. Ekinci, Emre, 2019. "Discretionary bonuses and turnover," Labour Economics, Elsevier, vol. 60(C), pages 30-49.
    18. Benoît S. Y. Crutzen & Otto H. Swank & Bauke Visser, 2013. "Confidence Management: On Interpersonal Comparisons in Teams," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(4), pages 744-767, December.
    19. Kampkötter, Patrick & Sliwka, Dirk, 2014. "Wage premia for newly hired employees," Labour Economics, Elsevier, vol. 31(C), pages 45-60.
    20. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    21. Ferreira, Priscila, 2009. "The determinants of promotions and firm separations," ISER Working Paper Series 2009-11, Institute for Social and Economic Research.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ozechr:v:49:y:2009:i:2:p:107-137. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/oznzsea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.