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Enriching a Theory of Wage and Promotion Dynamics inside Firms

  • Robert Gibbons

    (Massachusetts Institute of Technology and National Bureau of Economic Research)

  • Michael Waldman

    (Cornell University)

In previous work, we showed that a model that integrates job assignment, human capital acquisition, and learning can explain several empirical findings concerning wage and promotion dynamics inside firms. In this article, we extend that model in two ways. First, we incorporate schooling and derive further testable implications that we then compare with the available empirical evidence. Second, and more important, we show that introducing "task-specific" human capital allows us to produce cohort effects. We further argue that task-specific human capital is a realistic concept and may have many important implications. We also discuss limitations of our (extended) approach.

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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 24 (2006)
Issue (Month): 1 (January)
Pages: 59-108

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Handle: RePEc:ucp:jlabec:v:24:y:2006:i:1:p:59-108
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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