Incentives and earnings growth

Anders Frederiksen ()

Journal of Economic Behavior & Organization, 2013, vol. 85, issue C, 97-107

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.

Keywords: Explicit incentives; Implicit incentives; Performance; Earnings growth; Personnel economics (search for similar items in EconPapers)
JEL-codes: J30 J41 M50 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:85:y:2013:i:c:p:97-107

DOI: 10.1016/j.jebo.2012.11.005

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