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Review of Economic Studies Vol. 90 No. 4 2023

Career Spillovers in Internal Labour Markets

Nicola Bianchi1; Giulia Bovini2; Jin Li3; Matteo Paradisi4; Michael Powell5

1 Northwestern University Kellogg School of Management and NBER · 2 Statistics and Research Department Bank of Italy, Economics, , Structural Economic Analysis Directorate, Households and Labour Market Division · 3 University of Hong Kong The · 4 EIEF · 5 Northwestern University Kellogg School of Management,

Abstract

This article 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.

DOI
10.1093/restud/rdac067
Volume
90
Issue
4
Pages
1800-1831
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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