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Working Hours and Top Management Appointments: Evidence from Linked Employer-Employee Data

Author

Listed:
  • Frederiksen, Anders

    () (Aarhus University)

  • Kato, Takao

    () (Colgate University)

  • Smith, Nina

    () (Aarhus University)

Abstract

By combining Danish registry data covering the population of Danish workers with the Danish Labor Force Survey (DLFS) which provides detailed data on working hours, we provide fresh evidence and insights on a potentially important role that career concerns/considerations play in accounting for the incidence of long working hours. First, we obtain new and robust evidence with external validity on a positive association between working hours and career success (measured by top management appointments). Second, we illuminate that the observed positive association between working hours and career success is consistent with three distinct theories: (i) human capital; (ii) rat race; and (iii) tournament. Third, guided by each theory, we go beyond a simple association between the quantity of working hours and career success, and explore what kinds of working hours are more beneficial for career advancement. Specifically we find: (i) for managers, working long hours will help them increase their odds of top management appointments in the same firm, while not in a different firm, while for non-managerial professionals and other workers, both internal and external hours will help them raise their odds of career success; (ii) the odds of top management appointments will rise significantly by becoming the longest working hour person among the peers; (iii) working nonstandard hours (evening/night) will be beneficial for career advancement; and (iv) workers with high desired hours will enjoy greater odds of top management appointments even after controlling for actual hours. We interpret each finding from the three theoretical perspectives.

Suggested Citation

  • Frederiksen, Anders & Kato, Takao & Smith, Nina, 2018. "Working Hours and Top Management Appointments: Evidence from Linked Employer-Employee Data," IZA Discussion Papers 11675, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11675
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    References listed on IDEAS

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    1. Jennifer Brown, 2011. "Quitters Never Win: The (Adverse) Incentive Effects of Competing with Superstars," Journal of Political Economy, University of Chicago Press, vol. 119(5), pages 982-1013.
    2. Dora Gicheva, 2013. "Working Long Hours and Early Career Outcomes in the High-End Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 31(4), pages 785-824.
    3. Sherwin Rosen, 1972. "Learning by Experience as Joint Production," The Quarterly Journal of Economics, Oxford University Press, vol. 86(3), pages 366-382.
    4. 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.
    5. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer.
    6. Nina Smith & Valdemar Smith & Mette Verner, 2013. "Why are So Few Females Promoted into CEO and Vice President Positions? Danish Empirical Evidence, 1997–2007," ILR Review, Cornell University, ILR School, vol. 66(2), pages 380-408, April.
    7. Peter Kuhn & Fernando Lozano, 2008. "The Expanding Workweek? Understanding Trends in Long Work Hours among U.S. Men, 1979-2006," Journal of Labor Economics, University of Chicago Press, vol. 26(2), pages 311-343, April.
    8. Robert Gibbons & Michael Waldman, 1999. "A Theory of Wage and Promotion Dynamics Inside Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1321-1358.
    9. Kenneth J. Arrow, 1962. "The Economic Implications of Learning by Doing," Review of Economic Studies, Oxford University Press, vol. 29(3), pages 155-173.
    10. George Akerlof, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 599-617.
    11. Landers, Renee M & Rebitzer, James B & Taylor, Lowell J, 1996. "Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms," American Economic Review, American Economic Association, vol. 86(3), pages 329-348, June.
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    More about this item

    Keywords

    working hours; top management appointments; promotions; human capital; job assignment; rat race; adverse selection; tournament;

    JEL classification:

    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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