Article ID Journal Published Year Pages File Type
883705 Journal of Economic Behavior & Organization 2013 11 Pages PDF
Abstract

The career prospects of newly recruited employees differ substantially within an organization. The stars experience considerable growth in earnings; others can hardly maintain their entry salaries. This article sheds light on the mechanisms generating the observed heterogeneity in earnings growth by investigating the effects that explicit short-run incentives and implicit incentives have on earnings growth. The model's predictions are tested using personnel records from a large bank and are found to be consistent with the observed earnings growth during the first half of the employees’ careers.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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