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Promotion, Turnover, Earnings, and Firm-Sponsored Training

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  • Hideo Owan

    (Washington University)

Abstract

I develop a model in which different technological conditions lead to distinct equilibria with different patterns in labor mobility, promotion, earning distribution, and provision of firm-sponsored training. Key is the asymmetric learning of workers' characteristics. Because of the information that is conveyed to the market by promotion, firms have incentives to adopt strategic promotion policies, which result in different patterns in the use of internal labor market. The theory explains well the differences between the Japanese and the United States labor markets.

Suggested Citation

  • Hideo Owan, 2004. "Promotion, Turnover, Earnings, and Firm-Sponsored Training," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 955-978, October.
  • Handle: RePEc:ucp:jlabec:v:22:y:2004:i:4:p:955-954
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:labeco:v:51:y:2018:i:c:p:294-306 is not listed on IDEAS
    2. Suman Ghosh & Michael Waldman, 2010. "Standard promotion practices versus up-or-out contracts," RAND Journal of Economics, RAND Corporation, vol. 41(2), pages 301-325.
    3. Bilanakos, Christos, 2013. "Career concerns and firm – sponsored general training," Research in Economics, Elsevier, vol. 67(2), pages 117-132.
    4. 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.
    5. Elizabeth Davis & Matthew Freedman & Julia Lane & Brian McCall & Nicole Nestoriak & Timothy Park, "undated". "Product Market Competition and Human Resource Practices: An Analysis of the Retail Food Sector," Working Papers 0905, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
    6. Junichiro Ishida, 2012. "Promotion without Commitment: Signaling, Time Inconsistency and Decentralization of the Firm," ISER Discussion Paper 0843, Institute of Social and Economic Research, Osaka University.
    7. Jed DeVaro & Michael Waldman, 2012. "The Signaling Role of Promotions: Further Theory and Empirical Evidence," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 91-147.
    8. Jed DeVaro & Antti Kauhanen, 2016. "An “Opposing Responses” Test of Classic versus Market-Based Promotion Tournaments," Journal of Labor Economics, University of Chicago Press, vol. 34(3), pages 747-779.
    9. BÃ¥rd Harstad, 2007. "Organizational Form and the Market for Talent," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 581-611.
    10. Waldman, Michael, 2013. "Classic promotion tournaments versus market-based tournaments," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 198-210.
    11. Kameshwari Shankar & Suman Ghosh, 2005. "Favorable Selection in the Labor Market: A Theory of Worker Mobility in R&D Intensive Industries," Working Papers 05006, Department of Economics, College of Business, Florida Atlantic University.
    12. Jin, Xin, 2014. "The Signaling Role of Note Being Promoted: Theory and Evidence," MPRA Paper 58484, University Library of Munich, Germany.
    13. Michael Waldman & Ori Zax, 2016. "An Exploration of the Promotion Signaling Distortion," Journal of Law, Economics, and Organization, Oxford University Press, vol. 32(1), pages 119-149.
    14. Xin Jin, 2014. "The Signaling Role of Not Being Promoted: Theory and Evidence," Working Papers 0314, University of South Florida, Department of Economics.
    15. 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.
    16. DeVaro, Jed, 2011. "Using "opposing responses" and relative performance to distinguish empirically among alternative models of promotions," MPRA Paper 35175, University Library of Munich, Germany.
    17. Jed DeVaro & Hodaka Morita, 2013. "Internal Promotion and External Recruitment: A Theoretical and Empirical Analysis," Journal of Labor Economics, University of Chicago Press, vol. 31(2), pages 227-269.
    18. 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.
    19. Prasad, Suraj & Tran, Hien, 2013. "Work practices, incentives for skills, and training," Labour Economics, Elsevier, vol. 23(C), pages 66-76.
    20. Junichiro Ishida, 2012. "Dynamically Sabotage-Proof Tournaments," Journal of Labor Economics, University of Chicago Press, vol. 30(3), pages 627-655.
    21. Atsuko Tanaka, "undated". "Employer Loyalty, Training, and Female Labor Supply," Working Papers 2015-27, Department of Economics, University of Calgary, revised 25 Mar 2016.
    22. repec:bla:ecinqu:v:55:y:2017:i:2:p:1091-1103 is not listed on IDEAS
    23. MORITA, Hodaka & TANG, Cheng-Tao, 2017. "Asset Specificity, Human Capital Acquisition, and Labor Market Competition," Discussion paper series HIAS-E-42, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.

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