The Signalling Role of Promotion in Japan

Kazuaki Okamura ()
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Kazuaki Okamura: Department of Economics and Social Sciences, Faculty of Humanities and Economics, Kochi University

No 1112, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: Under asymmetric information conditions regarding worker productivity between current and prospective employers, a worker's promotion signals his/her productivity. In this Paper, we tested the signalling role of promotion, using Japanese micro-level data. We found that among lower-level positions, promotion seems to signal a worker's ability, and both the business cycle and foreign-capital ratio of his/her company significantly strengthen this effects. These results suggest that external labour market conditions (i.e. asymmetric information regarding a worker's abilities between a current and prospective employer) affect the economic differences among workers in the internal labour market.

Keywords: Strategically delayed promotion; Signalling; Wage growth; Japan. (search for similar items in EconPapers)
JEL-codes: C23 J31 L22 (search for similar items in EconPapers)
Pages: 20pages
Date: 2011-08
New Economics Papers: this item is included in nep-bec, nep-cta, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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