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Promotion signaling, gender, and turnover: New theory and evidence

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  • Cassidy, Hugh
  • DeVaro, Jed
  • Kauhanen, Antti

Abstract

We extend promotion signaling theory to incorporate gender and across-firm mobility (within and across job levels). Evidence from worker-firm-linked Finnish panel data supports our theory for some groups. Controlling for worker performance (inferred from performance-related pay), within-firm promotion probabilities are increasing (and wage increases from promotion are decreasing) in educational attainment for some educational groups, with results stronger for first than for subsequent promotions. Women have lower promotion probabilities than men and a greater sensitivity of promotion probability to educational attainment. Across-firm promotions are rare but bring wage increases exceeding those for internal promotions and across-firm lateral moves.

Suggested Citation

  • Cassidy, Hugh & DeVaro, Jed & Kauhanen, Antti, 2016. "Promotion signaling, gender, and turnover: New theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 140-166.
  • Handle: RePEc:eee:jeborg:v:126:y:2016:i:pa:p:140-166
    DOI: 10.1016/j.jebo.2016.03.016
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    2. Kato, Takao & Ogawa, Hiromasa & Owan, Hideo, 2016. "Working Hours, Promotion and the Gender Gap in the Workplace," IZA Discussion Papers 10454, Institute for the Study of Labor (IZA).
    3. Dato, Simon & Grunewald, Andreas & Kräkel, Matthias & Müller, Daniel, 2016. "Asymmetric employer information, promotions, and the wage policy of firms," Games and Economic Behavior, Elsevier, vol. 100(C), pages 273-300.
    4. repec:taf:applec:v:49:y:2017:i:12:p:1226-1240 is not listed on IDEAS
    5. Leonie Gerhards & Michael Kosfeld, 2017. "I (Don't) Like You! But Who Cares? Gender Differences in Same Sex and Mixed Sex Teams," CESifo Working Paper Series 6523, CESifo Group Munich.
    6. repec:eee:labeco:v:51:y:2018:i:c:p:294-306 is not listed on IDEAS

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