TY  - JOUR
AU  - Gibbons,Robert
AU  - Waldman,Michael
TI  - Enriching a Theory of Wage and Promotion Dynamics Inside Firms
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9849
PY  - 2003
Y2  - July 2003
UR  - http://www.nber.org/papers/w9849
L1  - http://www.nber.org/papers/w9849.pdf
N1  - Author contact info:
Robert S. Gibbons
MIT Sloan School of Management
100 Main Street, E62-524
Cambridge, MA  02142
Tel: 617/253-0283
Fax: 617/253-2660
E-Mail: rgibbons@mit.edu

Michael Waldman
Johnson Graduate School of Management
323 Sage Hall
Cornell University
Ithaca, NY  14853-6201
Tel: (607) 255-8631
Fax: (607) 254-4590
E-Mail: mw46@cornell.edu
AB  - In previous work we showed that a model that integrates job assignment, human-capital acquisition, and learning can explain several empirical findings concerning wage and promotion dynamics inside firms. In this paper we extend that model in two ways. First, we incorporate schooling into the model and derive a number of testable implications that we then compare with the available empirical evidence. Second, and more important, we show that introducing  task-specific' human capital allows us to produce cohort effects (i.e., the finding that a cohort that enters a firm at a low wage will continue to earn below-average wages years later). We argue that task-specific human capital is a realistic concept and may have many important implications. We also discuss limitations of our (extended) approach.
ER  -