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Fast track: is it in the genes? The promotion policy of a large Japanese firm

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  • Ariga, Kenn
  • Ohkusa, Yasushi
  • Brunello, Giorgio

Abstract

This paper studies the promotion policy of a large, hi-tech manufacturing Japanese firm. We find that the company has multiple ports of entry and hires a significant number of employees with previous job experience. In addition, cohort-peer differentiation in promotion starts much earlier than predicted by the common view, and there are clear signs of fast-track effects, so that individuals promoted faster earlier are more likely to be promoted faster later on. Fast-track effects are not in the genes, because they survive even after controlling for time-invariant individual effects, such as innate individual ability. The last result is difficult to justify using a pure learning model, where ability is time invariant, so that a richer learning model, incorporating, say, human capital considerations, is clearly required.
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  • Ariga, Kenn & Ohkusa, Yasushi & Brunello, Giorgio, 1999. "Fast track: is it in the genes? The promotion policy of a large Japanese firm," Journal of Economic Behavior & Organization, Elsevier, vol. 38(4), pages 385-402, April.
  • Handle: RePEc:eee:jeborg:v:38:y:1999:i:4:p:385-402
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    References listed on IDEAS

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    1. Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1007-1047.
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    6. Ariga, Kenn & Brunello, Giorgio & Ohkusa, Yasushi, 1997. "Promotions, Skill Formation, and Earnings Growth in a Corporate Hierarchy," Journal of the Japanese and International Economies, Elsevier, vol. 11(3), pages 347-384, September.
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    Cited by:

    1. Botosaru, Irene, 2011. "A Duration Model with Dynamic Unobserved Heterogeneity," TSE Working Papers 11-262, Toulouse School of Economics (TSE), revised Nov 2013.
    2. Araki, Shota & Kawaguchi, Daiji & Onozuka, Yuki, 2016. "University prestige, performance evaluation, and promotion: Estimating the employer learning model using personnel datasets," Labour Economics, Elsevier, vol. 41(C), pages 135-148.
    3. Ariga, Kenn, 2006. "Horizontal transfer, vertical promotion, and evolution of firm organization," Journal of the Japanese and International Economies, Elsevier, vol. 20(1), pages 20-49, March.
    4. Kambayashi, Ryo & Kato, Takao, 2012. "Good Jobs, Bad Jobs, and the Great Recession: Lessons from Japan's Lost Decade," IZA Discussion Papers 6666, Institute for the Study of Labor (IZA).
    5. Brösamle, Klaus J & Nordström Skans, Oskar, 2011. "Paths to higher office: evidence from the Swedish Civil Service," Working Paper Series, Center for Labor Studies 2011:17, Uppsala University, Department of Economics.
    6. Kathy A. Paulson Gjerde, 2002. "The existence of gender-specific promotion standards in the U.S," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(8), pages 447-459.
    7. 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.
    8. Christian Belzil & Michael Bognanno, 2004. "The Promotion Dynamics of American Executives," Working Papers 0404, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    9. Guido Friebel & Elena Panova, 2008. "Insider Privatization and Careers: A Study of a Russian Firm in Transition," NBER Chapters,in: The Analysis of Firms and Employees: Quantitative and Qualitative Approaches, pages 253-266 National Bureau of Economic Research, Inc.
    10. 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.
    11. Bas Klaauw & António Dias da Silva, 2011. "Wage dynamics and promotions inside and between firms," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1513-1548, October.
    12. Pedro S. Martins, 2015. "The Diversity of Personnel Practices and Firm Performance," Working Papers 62, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    13. Kräkel, Matthias & Schöttner, Anja, 2012. "Internal labor markets and worker rents," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 491-509.
    14. Grund, Christian, 2002. "The Wage Policy of Firms – Comparative Evidence for the U.S. and Germany from Personnel Data," IZA Discussion Papers 605, Institute for the Study of Labor (IZA).
    15. Edward Lazear & Paul Oyer, 2004. "The Structure of Wages and Internal Mobility," American Economic Review, American Economic Association, vol. 94(2), pages 212-216, May.
    16. Ivo Schedlinsky & Friedrich Sommer & Arnt Wöhrmann, 2016. "Risk-taking in tournaments: an experimental analysis," Journal of Business Economics, Springer, vol. 86(8), pages 837-866, November.
    17. Kambayashi, Ryo & Kato, Takao, 2011. "Long-term Employment and Job Security over the Last Twenty-Five Years: A Comparative Study of Japan and the U.S," IZA Discussion Papers 6183, Institute for the Study of Labor (IZA).
    18. Toshiaki Tachibanaki & Tetsuya Maruyama, 2001. "Promotion, Incentives, and Wages," NBER Chapters,in: Aging Issues in the United States and Japan, pages 335-360 National Bureau of Economic Research, Inc.
    19. Lima, Francisco, 2000. "Internal labour markets: a case study," FEUNL Working Paper Series wp378, Universidade Nova de Lisboa, Faculdade de Economia.
    20. Acosta, Pablo, 2010. "Promotion dynamics the Peter Principle: Incumbents vs. external hires," Labour Economics, Elsevier, vol. 17(6), pages 975-986, December.

    More about this item

    JEL classification:

    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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