A theory of Careers in Hierarchical Internal Labor Markets

The paper develops a model that explains a broad pattern of evidence on careers in multilevel organizations. It shows how job mobility inside firms depends on changes in the size of the organization. Promotion rates rise (fall) during a corporate expansion (contraction). Economic conditions therefore affect individual career mobility and earnings profiles. The model analyzes how the interaction between human capital accumulation and learning impacts on the assignment of workers to jobs at different levels of authority in the corporate hierarchy. The model makes predictions about the timing of the provision of formal training.career mobility, learning, sorting job assignment

You get what you pay for: Incentives and Selection in the Education System

We analyse worker self-selection with a special focus on teachers. The point of the paper is that worker composition is generally endogenous, due to worker self-selection. In a first step we analyse lab experimental data to provide causal evidence on particular sorting patterns. This evidence sets the stage for our field data analysis, which focuses specifically on selection patterns of teachers. We find that teachers are more risk averse than employees in other professions, which indicates that relatively risk averse individuals sort into teaching occupations under the current system. Using survey measures on trust and reciprocity we also find that teachers trust more and are less negatively reciprocal than other employees. Finally, we establish differences in personality based on the Big Five concept.education, training and the labour market;

Performance Pay and Multi-dimensional Sorting - Productivity, Preferences and Gender

This paper studies the impact of incentives on worker self-selection in a controlled laboratory experiment. Subjects face the choice between a fixed and a variable payment scheme. Depending on the treatment, the variable payment is a piece rate, a tournament or a revenue-sharing scheme. We find that output is higher in the variable pay schemes (piece rate, tournament, and revenue sharing) compared to the fixed payment scheme. Thisdifference is largely driven by productivity sorting. In addition personal attitudes such as willingness to take risks and relative self-assessment as well as gender affect the sorting decision in a systematic way. Moreover, self-reported effort is significantly higher in all variable pay conditions than in the fixed wage condition. Our lab findings are supported by an additional analysis using data from a large and representative sample. In sum, our findings underline the importance of multi-dimensional sorting, i.e., the tendency for different incentive schemes to systematically attract people with different individual characteristics.microeconomics ;

Performance Pay and Multi-dimensional Sorting - Productivity, Preferences and Gender

This paper studies the impact of incentives on worker self-selection in a controlledlaboratory experiment. Subjects face the choice between a fixed and a variable paymentscheme. Depending on the treatment, the variable payment is a piece rate, a tournamentor a revenue-sharing scheme. We find that output is higher in the variable pay schemes(piece rate, tournament, and revenue sharing) compared to the fixed payment scheme.This difference is largely driven by productivity sorting. In addition personal attitudessuch as willingness to take risks and relative self-assessment as well as gender affectthe sorting decision in a systematic way. Moreover, self-reported effort is significantlyhigher in all variable pay conditions than in the fixed wage condition. Our lab findingsare supported by an additional analysis using data from a large and representativesample. In sum, our findings underline the importance of multi-dimensional sorting,i.e., the tendency for different incentive schemes to systematically attract people withdifferent individual characteristics.labour economics ;

Performance Pay and Multidimensional Sorting - Productivity, Preferences and Gender

This paper studies the impact of incentives on worker self-selection in a controlled laboratory experiment. Subjects face the choice between a fixed and a variable payment scheme. Depending on the treatment, the variable payment is a piece rate, a tournament or a revenue-sharing scheme. We find that output is higher in the variable pay schemes (piece rate, tournament, and revenue sharing) compared to the fixed payment scheme. This difference is largely driven by productivity sorting. In addition personal attitudes such as willingness to take risks and relative self-assessment as well as gender affect the sorting decision in a systematic way. Moreover, self-reported effort is significantly higher in all variable pay conditions than in the fixed wage condition. Our lab findings are supported by an additional analysis using data from a large and representative sample. In sum, our findings underline the importance of multi-dimensional sorting, i.e., the tendency for different incentive schemes to systematically attract people with different individual characteristics.Sorting; Incentives; Piece Rates; Tournament; Revenue-Sharing; Risk Preferences; Social Preferences; Gender; Experiment; Field Evidence