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Promotion signaling, gender, and turnover: New theory and evidence

Hugh Cassidy (), Jed DeVaro () and Antti Kauhanen ()

Journal of Economic Behavior & Organization, 2016, vol. 126, issue PA, 140-166

Abstract: We extend promotion signaling theory to incorporate gender and across-firm mobility (within and across job levels). Evidence from worker-firm-linked Finnish panel data supports our theory for some groups. Controlling for worker performance (inferred from performance-related pay), within-firm promotion probabilities are increasing (and wage increases from promotion are decreasing) in educational attainment for some educational groups, with results stronger for first than for subsequent promotions. Women have lower promotion probabilities than men and a greater sensitivity of promotion probability to educational attainment. Across-firm promotions are rare but bring wage increases exceeding those for internal promotions and across-firm lateral moves.

Date: 2016
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