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Job Assignment with Multivariate Skills

  • Stefanie Brilon


    (Max Planck Institute for Research on Collective Goods, Bonn)

This paper analyzes the job assignment problem faced by a firm when workers’ skills are distributed along several dimensions and jobs require different skills to varying extent. I derive optimal assignment rules with and without slot constraints, and show that under certain circumstances workers may get promoted although in their new job they are expected to be less productive than in their old job. This can be interpreted as a version of the Peter Principle which states that workers get promoted up to their level of incompetence.

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Paper provided by Max Planck Institute for Research on Collective Goods in its series Working Paper Series of the Max Planck Institute for Research on Collective Goods with number 2010_25.

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Date of creation: May 2010
Date of revision:
Handle: RePEc:mpg:wpaper:2010_25
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  1. Demougin, Dominique & Siow, Aloysius, 1994. "Careers in Ongoing Hierarchies," American Economic Review, American Economic Association, vol. 84(5), pages 1261-77, December.
  2. Tor Eriksson & Jaime Ortega, 2006. "The adoption of job rotation: Testing the theories," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 59(4), pages 653-666, July.
  3. Agrawal, Anup & Knoeber, Charles R. & Tsoulouhas, Theofanis, 2006. "Are outsiders handicapped in CEO successions?," Journal of Corporate Finance, Elsevier, vol. 12(3), pages 619-644, June.
  4. I. Valsecchi, 1996. "Job Assignment and Promotion," Departmental Working Papers 1996-07, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  5. Christina Gathmann & Uta Schönberg, 2010. "How General Is Human Capital? A Task-Based Approach," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 1-49, 01.
  6. Edward P. Lazear, 2004. "The Peter Principle: A Theory of Decline," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S141-S163, February.
  7. Michael Waldman, 2003. "Ex Ante versus Ex Post Optimal Promotion Rules: The Case of Internal Promotion," Economic Inquiry, Western Economic Association International, vol. 41(1), pages 27-41, January.
  8. Kate Antonovics & Limor Golan, . "Experimentation and Job Choice," GSIA Working Papers 2006-E41, Carnegie Mellon University, Tepper School of Business.
  9. 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.
  10. Jaime Ortega, 2001. "Job Rotation as a Learning Mechanism," Management Science, INFORMS, vol. 47(10), pages 1361-1370, October.
  11. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June.
  12. Robert Gibbons & Michael Waldman, 2006. "Enriching a Theory of Wage and Promotion Dynamics inside Firms," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 59-108, January.
  13. Joao Ricardo Faria, 2000. "An Economic Analysis of the Peter and Dilbert Principles," Working Paper Series 101, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
  14. Chan, William, 1996. "External Recruitment versus Internal Promotion," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 555-70, October.
  15. Robert Gibbons & Michael Waldman, 2004. "Task-Specific Human Capital," American Economic Review, American Economic Association, vol. 94(2), pages 203-207, May.
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