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On The Job Screening, Up Or Out Rules, And Firm Growth

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Author Info

  • O'FLAHERTY, B.
  • SIOW, A.

Abstract

This paper uses on-the-job screening to derive a stochastic and dynamic model of hiring, promotion, and dismissal policies, and their impact on total firm employment and output. The model provides an explanation of the up-or-out rule observed in many organizations. It also provides an explanation for a cost-of-adjustment mechanism for the stock of human capital in a firm.

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Bibliographic Info

Paper provided by Columbia University, Department of Economics in its series Discussion Papers with number 1989_02.

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Length: 39 pages
Date of creation: 1989
Date of revision:
Handle: RePEc:clu:wpaper:1989_02

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Related research

Keywords: economic growth ; enterprises ; human capital ; employment ; production;

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Citations

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Cited by:
  1. Sengupta, Sarbajit, 2004. "Delegating recruitment under asymmetric information," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1327-1347, November.
  2. Boyan Jovanovic & Yaw Nyarko, 1996. "Stepping Stone Mobility," NBER Working Papers 5651, National Bureau of Economic Research, Inc.
  3. Braz Camargo & Elena Pastorino, 2012. "Learning-by-employing: the value of commitment under uncertainty," Staff Report 475, Federal Reserve Bank of Minneapolis.
  4. James B. Rebitzer & Lowell J. Taylor, 2006. "When Knowledge is an Asset: Explaining the Organizational Structure of Large Law Firms," NBER Working Papers 12583, National Bureau of Economic Research, Inc.
  5. Siow, Aloysius & Zhu, Xiaodong, 1997. "The creation of plants and firms," Journal of Economic Dynamics and Control, Elsevier, vol. 22(1), pages 141-178, November.
  6. Abe, Naohito & Gaston, Noel & Kubo, Katsuyuki, 2005. "Executive pay in Japan: the role of bank-appointed monitors and the Main Bank relationship," Japan and the World Economy, Elsevier, vol. 17(3), pages 371-394, August.
  7. Dan A. Black & Mark A. Loewenstein, 1996. "Dismissals and Match-Specific Rents," Labor and Demography 9604002, EconWPA.
  8. Robert Gibbons, 1996. "Incentives and Careers in Organizations," NBER Working Papers 5705, National Bureau of Economic Research, Inc.
  9. Alexander K. Koch & Julia Nafziger, 2012. "Job Assignments under Moral Hazard: The Peter Principle Revisited," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 21(4), pages 1029-1059, December.
  10. Cowen, Tyler & Glazer, Amihai, 2007. "Esteem and ignorance," Journal of Economic Behavior & Organization, Elsevier, vol. 63(3), pages 373-383, July.
  11. Demougin, Dominique & Siow, Aloysius, 1996. "Managerial husbandry and the dynamics of ongoing hierarchies," European Economic Review, Elsevier, vol. 40(7), pages 1483-1499, August.

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