Internal and External Labor Markets: A Personnel Economics Approach

Edward Lazear and Paul Oyer ()

No 10192, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Internal labor markets are those where workers are hired into entry level jobs and higher levels are filled from within. Wages are determined internally and may be quite free of market pressure. External labor markets imply that workers move somewhat fluidly between firms and wages are determined by some aggregate process where firms do not have significant discretion over wage setting. There are a number of theories that lead to internal labor markets. Using data from Sweden from the late 1980s, it is found that although there is significant evidence of internal promotion being important, a significant external market exists that affects both wage setting and hiring patterns. Even in Sweden, which most would not choose as the best example of a free labor market, external factors seem to create strong discipline on the ability of firms to set wages.

JEL-codes: M5 (search for similar items in EconPapers)
Date: 2003-12
New Economics Papers: this item is included in nep-lab and nep-mac
Note: LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published as Lazear, Edward P. and Paul Oyer. "Internal And External Labor Markets: A Personnel Economics Approach," Labour Economics, 2004, v11(5,Oct), 527-554.

Downloads: (external link)
http://www.nber.org/papers/w10192.pdf (application/pdf)

Related works:
Journal Article: Internal and external labor markets: a personnel economics approach (2004)
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:nbr:nberwo:10192

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10192

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().