Journal of Labor Economics Vol. 31 No. 2 2013
Internal Promotion and External Recruitment: A Theoretical and Empirical Analysis
Abstract
We present a theoretical and empirical analysis of internal promotion versus external recruitment, using a job-assignment model involving competing firms with heterogeneous productivities and two-level job hierarchies with one managerial position. The model predicts that, controlling for the number of managers, increasing the number of lower-level workers is associated with (1) greater internal promotion as opposed to external recruitment, (2) higher profit, and (3) more general training. Empirical analysis of a large cross section of British employers is consistent with these predictions.
- DOI
- 10.1086/667814
- Volume
- 31
- Issue
- 2
- Pages
- 227-269
- Language
- en
- Sources
- openalex crossref