Job Matching Within and Across Firms

Abstract

In order to analyze careers both within and across firms, this paper proposes a matching model of the labor market that extends existing models of job assignment and learning about workers' abilities. The model accounts for worker mobility across jobs and firms, for varying degrees of generality of ability, and for the possibility that firms affect the information they acquire about workers through job assignment. I characterize equilibrium assignment and wages, and show how, depending on how abilities and jobs are distributed across firms, equilibrium gives rise to widely varying patterns of job mobility within firms and turnover across firms, even if matching would be perfectly assortative in the absence of uncertainty. The implied job and wage dynamics display features that are consistent with a broad set of empirical findings on careers in firms and the labor market. In particular, workers can experience gradual promotions and wage increases following successful performance but few or no demotions when employed by the same firm. The model also produces turnover across firms and occupations after both successful and unsuccessful experiences, leading to wage increases or decreases following a firm or occupation change. Overall, the results in this paper provide a unified framework in which to interpret the dynamics of jobs and wages in firms and the labor market.

Talent Rewards, Talent Uncertainty, and Career Tracks

“…The standard learning models of career assume that a worker's talent is specific to, and constant across, a set of vertically ordered tasks (e.g., a firm, an occupation), which is equivalent to settingτ (m ) =τ (m) for allm in this model. Non-trivial career paths are obtained by a gradual discovery of the talent, a task-specific human capital, a taskspecific speed of learning, and other enrichments of the model (e.g., Waldman 1999, 2006;Antonovics and Golan 2012;Groes, Kircher, and Manovskii 2015;Pastorino 2015). In this paper, I effectively assume that talent updates are not only specific to a set of vertically ordered tasks, but also specific to a segment of the vertically ordered tasks around the attempted task.…”