Career Spillovers in Internal Labor Markets

Nicola Bianchi, Giulia Bovini, Jin Li, Matteo Paradisi and Michael Powell

No 28605, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies career spillovers across workers, which arise in firms with limited promotion opportunities. We exploit a 2011 Italian pension reform that unexpectedly tightened eligibility criteria for the public pension, leading to sudden, substantial, and heterogeneous retirement delays. Using administrative data on Italian private-sector workers, the analysis leverages cross-firm variation to isolate the effect of retirement delays among soon-to-retire workers on the wage growth and promotions of their colleagues. We find evidence of spillover patterns consistent with older workers blocking the careers of their younger colleagues, but only in firms with limited promotion opportunities.

JEL-codes: J21 J26 J31 M51 M52 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-age, nep-eur and nep-lma
Note: AG LS PE
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Published as Nicola Bianchi & Giulia Bovini & Jin Li & Matteo Paradisi & Michael Powell, 2023. "Career Spillovers in Internal Labour Markets," Review of Economic Studies, Oxford University Press, vol. 90(4), pages 1800-1831.

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Journal Article: Career Spillovers in Internal Labour Markets (2023)
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