The fields of personnel and organizational economics have started to develop and test models of the internal workings of firms, paying particular attention to careers within firms. This project took a new approach on career and wage dynamics by using a large longitudinal linked employer-employee dataset.
By adopting this approach, we make the following three contributions to the literature. First, we present some of the first analyses of the interplay between within-firm careers and job mobility. This is a significant open question that has recently started to receive attention in the theoretical literature. Second, we empirically distinguish among various theoretical models of promotions. There are many competing models of promotions, but empirical work has not been able to distinguish among these theoretical models. We apply a recent empirical framework to fill this gap. Third, we address entirely new questions, such as the long-term consequences of promotions and demotions.
The project was financed by the Academy of Finland.