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Internal Promotion Competitions in Firms

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Show full item recordAuthor
DeVaro, Jed
Abstract
[Excerpt] Using a sample of skilled workers from a cross section of establishments in four metropolitan areas of the United States, I present evidence suggesting that promotions are determined by relative worker performance. I then estimate a structural model of promotion tournaments (treating as endogenous promotions, worker performance, and the wage spread from promotion) that simultaneously accounts for worker and firm behavior and how the interaction of these behaviors gives rise to promotions. The results are consistent with the predictions of tournament theory that employers set wage spreads to induce optimal performance levels, and that workers are motivated by larger spreads.
Date Issued
2006-09-01Subject
promotion; worker; performance; model; tournament; theory; spreads
Rights
Required Publisher Statement: Copyright by the RAND Corporation. Published version posted with special permission of the copyright holder.
Type
article