The Signalling Role of Promotion in Japan
AbstractUnder asymmetric information conditions regarding worker productivity between current and prospective employers, a worker's promotion signals his/her productivity. In this Paper, we tested the signalling role of promotion, using Japanese micro-level data. We found that among lower-level positions, promotion seems to signal a worker's ability, and both the business cycle and foreign-capital ratio of his/her company significantly strengthen this effects. These results suggest that external labour market conditions (i.e. asymmetric information regarding a worker's abilities between a current and prospective employer) affect the economic differences among workers in the internal labour market.
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Bibliographic InfoPaper provided by Graduate School of Economics, Kobe University in its series Discussion Papers with number 1112.
Date of creation: Aug 2011
Date of revision:
Strategically delayed promotion; Signalling; Wage growth; Japan.;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-22 (All new papers)
- NEP-BEC-2011-08-22 (Business Economics)
- NEP-CTA-2011-08-22 (Contract Theory & Applications)
- NEP-HRM-2011-08-22 (Human Capital & Human Resource Management)
- NEP-LAB-2011-08-22 (Labour Economics)
- NEP-LMA-2011-08-22 (Labor Markets - Supply, Demand, & Wages)
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