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Internal Labour Markets: Causes and Consequences

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  • Siebert, W S
  • Addison, J T

Abstract

The paper analyzes the causes and consequences of internal labor market rules that yield long tenure promotion from within, seniority, pensions, and "due process" in dismissals. About half the workforce are estimated to be in such markets. Competitive reasons for internal labor markets as a response to specific training and arms-length relationships between workers and firms are surveyed. These reasons are found to be consistent with the pattern of internal labor markets among non-union firms. However, some internal labor markets, (e.g. among small unionized firms) are probably a response to union pressure and government regulations. In these circumstances, low labor mobility could pose problems for policy. Copyright 1991 by Oxford University Press.

Suggested Citation

  • Siebert, W S & Addison, J T, 1991. "Internal Labour Markets: Causes and Consequences," Oxford Review of Economic Policy, Oxford University Press, vol. 7(1), pages 76-92, Spring.
  • Handle: RePEc:oup:oxford:v:7:y:1991:i:1:p:76-92
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    Citations

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    Cited by:

    1. John T. Addison & W. Stanley Siebert, 1992. "The Social Charter: Whatever Next?," British Journal of Industrial Relations, London School of Economics, vol. 30(4), pages 495-513, December.
    2. John Grahl & Paul League, 1992. "Integration Theory and European Labour Markets," British Journal of Industrial Relations, London School of Economics, vol. 30(4), pages 515-527, December.
    3. Baines, Dudley & Howlett, Peter & Johnson, Paul, 1992. "Human capital and payment systems in Britain, 1833-1914," Economic History Working Papers 22453, London School of Economics and Political Science, Department of Economic History.
    4. Clive Belfield & Xiangdong Wei, 2004. "Employer size-wage effects: evidence from matched employer-employee survey data in the UK," Applied Economics, Taylor & Francis Journals, vol. 36(3), pages 185-193.
    5. Heywood, John S. & Wei, Xiangdong, 1997. "Piece-Rate Payment Schemes and the Employment of Women: The Case of Hong Kong," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 237-255, October.
    6. Stephani, Jens, 2012. "Wage growth and career patterns of German low-wage workers," IAB Discussion Paper 201201, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Gong, Xiaodong & van Soest, Arthur, 2002. "Wage differentials and mobility in the urban labour market: a panel data analysis for Mexico," Labour Economics, Elsevier, vol. 9(4), pages 513-529, September.
    8. Jenny Meyer, 2011. "Workforce age and technology adoption in small and medium-sized service firms," Small Business Economics, Springer, vol. 37(3), pages 305-324, October.
    9. Daniel, Kirsten & Heywood, John S., 2007. "The determinants of hiring older workers: UK evidence," Labour Economics, Elsevier, vol. 14(1), pages 35-51, January.
    10. Stephani, Jens, 2013. "Does it matter where you work? : employer characteristics and the wage growth of low-wage workers and higher-wage workers," IAB Discussion Paper 201304, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    11. Cornelissen, Thomas & Hübler, Olaf, 2007. "Unobserved Individual and Firm Heterogeneity in Wage and Tenure Functions: Evidence from German Linked Employer-Employee Data," IZA Discussion Papers 2741, Institute for the Study of Labor (IZA).

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