Earnings Progression, Human Capital and Incentives: Theory and Evidence

Anders Frederiksen ()

No 4863, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The career prospects of newly recruited employees differ substantially within an organization. The stars experience a considerable growth in earnings; others can hardly maintain their entry salaries. This article sheds light on the mechanisms generating the observed heterogeneity in earnings progression by investigating the effects of on-the-job human capital acquisition, explicit short-run incentives and career concern incentives on earnings progression. The model leads to predictions about the incentive structure and the progression in both cross-sectional and individual earnings which are supported by the empirical analysis based on personnel records from a large bank.

Keywords: personnel economics; explicit incentives; career concern incentives; performance; earnings dynamics (search for similar items in EconPapers)
JEL-codes: J30 J41 M50 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2010-04
New Economics Papers: this item is included in nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published as 'Incentives and Earnings Growth' in: Journal of Economic Behavior and Organization, 2013, 85 (1), 97-107

Downloads: (external link)
https://docs.iza.org/dp4863.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp4863

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().