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Career Spillovers in Internal Labor Markets

Author

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

Abstract

This paper 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 L. Powell, 2021. "Career Spillovers in Internal Labor Markets," NBER Working Papers 28605, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28605
    Note: AG LS PE
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    Cited by:

    1. Adamopoulou, Effrosyni & Manaresi, Francesco & Rachedi, Omar & Yurdagul, Emircan, 2021. "Minimum Wages and Insurance within the Firm," IZA Discussion Papers 14943, Institute of Labor Economics (IZA).
    2. Virginia Minni, 2023. "Making the invisible hand visible: Managers and the allocation of workers to jobs," STICERD - Economic Organisation and Public Policy Discussion Papers Series 72, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    3. Francesco Devicienti & Bernardo Fanfani, 2025. "Firms' margins of adjustment to wage growth: the case of Italian collective bargaining," Economica, London School of Economics and Political Science, vol. 92(365), pages 107-149, January.
    4. Agostinho, Rui & Baptista, Rui & Hessels, Jolanda & Castro-Silva, Hugo & van der Zwan, Peter, 2025. "The entrepreneurship fountain of youth: Younger management ranks generate more entrepreneurs," Journal of Business Venturing, Elsevier, vol. 40(4).
    5. 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).
    6. Sturm, Patrick, 2025. "Workplace peer effects in retirement," W.E.P. - Würzburg Economic Papers 112, University of Würzburg, Department of Economics.
    7. Reed, Mark S. & McCarthy, Julia M. & Jensen, Eric A. & Everett, Rosie & Rudman, Hannah, 2025. "Governing high-integrity markets for ecosystem services," Ecosystem Services, Elsevier, vol. 75(C).
    8. Mitchell Hoffman & Christopher T. Stanton, 2024. "People, Practices, and Productivity: A Review of New Advances in Personnel Economics," NBER Working Papers 32849, National Bureau of Economic Research, Inc.
    9. Sona Badalyan, 2025. "Retirement Age Reforms and Worker Substitutability: Implications for Employment of Older Workers," CERGE-EI Working Papers wp794, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

    More about this item

    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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