Monkey bars and ladders: The importance of lateral and vertical job mobility in internal labor market careers

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor, (2) internationalization of labor markets, (3) welfare state and labor market, (4) labor markets in transition countries, (5) the future of labor, (6) evaluation of labor market policies and projects and (7) general labor economics. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available on the IZA website (www.iza.org) or directly from the author. In this paper, we compare results from the existing literature with the outcomes from analyzing personnel data of the Dutch aircraft manufacturer Fokker during the period January 1, 1987, the day the company started with their electronic personnel filing system, until March 15, 1996, the day the company filed for bankruptcy. We shed light on differences in the functioning of internal labor markets during periods of workforce growth and decline. We find multiple ports of entry that are concentrated in low blue and white-collar levels. New entrants are younger and have higher educational levels than incumbent workers who are promoted to similar jobs. Despite substantial variation in individual wages, careers are important as wages are strongly related to job levels. Promotion rates fall and demotion rates rise when the firm enters the stage of demise. Job-rotation improves promotion chances, stimulates wage growth, and reduces the lay-off risk.JEL Classification: J31, J41, J63

Performance, seniority, and wages: formal salary systems and individual earnings profiles

“…Higher educational degrees also raise promotion prospects. Moreover, promotion prospects are generally poorer for later cohorts because promotion rates fall during downsizing (see Dohmen, Kriechel, and Pfann, 2004). also means that two workers with an identical score in the same job might have the same contemporaneous performance rating even though the more productive of the two earns more being assigned to a higher salary scale because of better performance in the past.…”

“…M/A and F/I report only 4 categories. e. Job levels for Fokker are inferred from job transitions and are defined in Dohmen, Kriechel, and Pfann (2004). While blue-collar workers mainly occupy three job levels in the Fokker data, F/I report 8 levels for their non-managerial workers.…”

“…Moreover, the annual upward salary scale transition rate fell from 26.8% during expansion to only 18.2% during downsizing for bluecollar workers and from 16.1% to 9.2% for white-collar workers. A major reason for lower upward wage mobility is the decline in upward job mobility rates during downsizing (see Dohmen, Kriechel, and Pfann, 2004). At the same time, salary scale degradations -although generally rare -become more likely during the downsizing episode.…”

“…consecutive education modules defined in the notes to Table 1. 25 Job levels were derived from job transitions and are defined in Dohmen, Kriechel, and Pfann (2004).…”

Career and Wage Dynamics: Evidence from Linked Employer-Employee Data

“…Yet, many of the empirical findings by Baker et al (1994) have received support from other case studies, including Seltzer and Merrett (2000), Treble et al (2001) and Dohmen et al (2004), which use data from different institutional environments, time periods and industries. Nevertheless, there are also some important differences in the results between these studies, leaving open the question of which of the results hold true across various settings and which are particular to the specific case studies.…”