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Career Spillovers in Internal Labour Markets

Author

Listed:
  • Nicola Bianchi
  • Giulia Bovini
  • Jin Li
  • Matteo Paradisi
  • Michael Powell

Abstract

This article studies career spillovers across workers, which arise in firms with limited promotion opportunities. We exploit a 2011 Italian pension reform that unexpectedly tightened eligibility criteria for the public pension, leading to sudden, substantial, and heterogeneous retirement delays. Using administrative data on Italian private-sector workers, the analysis leverages cross-firm variation to isolate the effect of retirement delays among soon-to-retire workers on the wage growth and promotions of their colleagues. We find evidence of spillover patterns consistent with older workers blocking the careers of their younger colleagues, but only in firms with limited promotion opportunities.

Suggested Citation

  • Nicola Bianchi & Giulia Bovini & Jin Li & Matteo Paradisi & Michael Powell, 2023. "Career Spillovers in Internal Labour Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(4), pages 1800-1831.
    • Handle: RePEc:oup:restud:v:90:y:2023:i:4:p:1800-1831.
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    File URL: http://hdl.handle.net/10.1093/restud/rdac067
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    Cited by:

    1. Allen, Steven G., 2023. "Demand for older workers: What do we know? What do we need to learn?," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    2. Devicienti, Francesco & Fanfani, Bernardo, 2021. "Firms' Margins of Adjustment to Wage Growth: The Case of Italian Collective Bargaining," IZA Discussion Papers 14532, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Wage growth; Promotions; Internal labour markets; Pension reform;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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