Nonpromotion Signals and Job Tenure: Theory and Evidence

Xin Jin

A chapter in Change at Home, in the Labor Market, and On the Job, 2020, vol. 48, pp 223-252 from Emerald Group Publishing Limited

Abstract: This chapter studies the negative signals associated with nonpromotion. I first show theoretically that, when workers' productivity rises little with additional years on the same job level, the negative signal associated with nonpromotion leads to wage decreases. On the other hand, when additional job-level tenure leads to a sizable increase in productivity, workers' wages increase. I then test my model's predictions using the personnel records from a large US firm from 1970–1988. I find a clear hump-shaped wage-job-tenure profile for workers who stay at the same job level, which supports my model's prediction.

Keywords: Signaling; job-level tenure; human capital accumulation; wages; nonpromotion; asymmetric learning; J24; J31; M51 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rleczz:s0147-912120200000048007

DOI: 10.1108/S0147-912120200000048007

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