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Incentives, Sorting and Productivity along the Career: Evidence from a Sample of Top Economists

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  • Coupé, Tom

    ()
    (Department of Economics, Aarhus School of Business)

  • Smeets, Valérie

    (Department of Economics, Aarhus School of Business)

  • Warzynski, Frédéric

    (Department of Economics, Aarhus School of Business)

Abstract

In this paper we study empirically the labor market of economists. We look at the mobility and promotion patterns of a sample of 1,000 top economists over thirty years and link it to their productivity and other personal characteristics. We find that the probability of promotion and of upward mobility is positively related to past production. However, the sensitivity of promotion and mobility to production diminishes with experience, indicating the presence of a learning process. We also find evidence that economists respond to incentives. They tend to exert more effort at the beginning of their career when dynamic incentives are important. This finding is robust to the introduction of tenure, which has an additional negative ex post impact on production. Our results indicate therefore that both promotions and tenure have an effect on the provision of incentives. Finally, we detect evidence of a sorting process, as the more productive individuals are allocated to the best ranked universities. We provide a very simple theoretical explanation of these results based on Holmström (1982) with heterogeneous firms.

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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 03-16.

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Length: 45 pages
Date of creation: 17 Jan 2003
Date of revision:
Handle: RePEc:hhs:aareco:2003_016

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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Keywords: Dynamic incentives; career concerns; sorting; productivity; internal labor markets; human capital; economic departments; promotions; mobility; tenure;

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References

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  1. Gibbons, R. & Murphy, K.J., 1990. "Optimal Incentive Contracts In The Presence Of Career Concerns: Theory And Evidence," Working papers 563, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Scharfstein, David. & Stein, Jeremy C., 1988. "Herd behavior and investment," Working papers WP 2062-88., Massachusetts Institute of Technology (MIT), Sloan School of Management.
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  12. Coupé, Tom & Smeets, Valerie & Warzynski, Frederic, 2003. "Incentives in Economic Departments: Testing Tournaments?," Working Papers 03-25, University of Aarhus, Aarhus School of Business, Department of Economics.
  13. Ault, David E & Rutman, Gilbert L & Stevenson, Thomas, 1979. "Mobility in the Labor Market for Academic Economists," American Economic Review, American Economic Association, vol. 69(2), pages 148-53, May.
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  18. Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 881-919, November.
  19. Gibbons, Robert & Waldman, Michael, 1999. "Careers in organizations: Theory and evidence," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 36, pages 2373-2437 Elsevier.
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  22. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
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Cited by:
  1. Vinod Mishra & Russell Smyth, 2012. "Are More Senior Academics Really More Research Productive than Junior Academics? Evidence from Australian Law Schools," Development Research Unit Working Paper Series 47-12, Monash University, Department of Economics.
  2. Pezzoni, Michele & Sterzi, Valerio & Lissoni, Francesco, 2012. "Career progress in centralized academic systems: Social capital and institutions in France and Italy," Research Policy, Elsevier, vol. 41(4), pages 704-719.
  3. Michael Rauber & Heinrich Ursprung, 2006. "Evaluation of researchers : a life cycle analysis of German academic economists," Working Papers of the Research Group Heterogenous Labor 06-08, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  4. Ana Maria Takahashi & Shingo Takahashi, 2010. "The effect of refereed articles on salary, promotion and labor mobility: The case of Japanese economists," Economics Bulletin, AccessEcon, vol. 30(1), pages 330-350.
  5. Smeets, Valerie, 2004. "Are There Fast Tracks in Economic Departments? Evidence from a Sample of Top Economists," Working Papers 04-4, University of Aarhus, Aarhus School of Business, Department of Economics.
  6. Susanne Warning & Christian Wiermann & Günther G. Schulze, 2008. "What and how long does it take to get tenure? The Case of Economics and Business Administration in Austria, Germany and Switzerland?," Discussion Paper Series 6, Department of International Economic Policy, University of Freiburg, revised Jul 2008.
  7. Michael Rauber & Heinrich Ursprung, 2007. "Life Cycle and Cohort Productivity in Economic Research: The Case of Germany," CESifo Working Paper Series 2093, CESifo Group Munich.
  8. Uschi Backes-Gellner, 2003. "Karriereanreize für Wissenschaftler an Hochschulen im deutsch-amerikanischen Vergleich," Working Papers 0051, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Jan 2004.
  9. Raquel Carrasco & Javier Ruiz-Castillo, 2012. "The evolution of the scientific productivity of highly productive economist," Economics Working Papers we1216, Universidad Carlos III, Departamento de Economía.
  10. DeVaro, Jed & Waldman, Michael, 2006. "The signaling role of promotions: Further theory and empirical evidence," MPRA Paper 1550, University Library of Munich, Germany.
  11. Mueller-Langer, Frank & Andreoli-Versbach, Patrick, 2014. "Open Access to Research Data: Strategic Delay and the Ambiguous Welfare Effects of Mandatory Data Disclosure," Discussion Papers in Economics 21037, University of Munich, Department of Economics.

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