Careers and productivity in an internal labor market

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This paper contributes to the existing literature by evaluating the effects of age and tenure on careers and productivity within an internal labor market. We use the administrative personnel records of a long balanced panel of blue-collar workers from a manufacturing firm in Germany with a distinct classification of wage groups and unique information on workers’ productivity in form of suggestions for productivity improvement. Using robust locally weighted regression, our main findings suggest that the probability of promotion is highest for younger workers and early in the career. Older workers are less likely to be promoted. The likelihood of making a rewarded suggestion is inversely u-shaped with respect to tenure and age. Furthermore, workers’ ability and firm-specific human capital determine the workers’ careers and productivity.
Original languageEnglish
JournalJournal of Business Economics : JBE
Issue number2
Pages (from-to)121-143
Number of pages23
Publication statusPublished - 01.02.2013

    Research areas

  • Economics
  • Human capital, Internal labor markets, Personnel economics, Productivity, Promotions