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Title:Earnings progression, human capital and incentives: Theory and evidence PDF Logo
Authors:Frederiksen, Anders
Issue Date:2010
Series/Report no.:Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 4863
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.
Subjects:Explicit incentives
career concern incentives
performance
earnings dynamics
personnel economics
JEL:J30
J41
M50
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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