Careers and Wages within Large Firms : Evidence from a Matched Employer-Employee Data Set

The relationship between the workers' career and wages is studied using a longitudinal sample of firms. The analysis shows that the interactions of human capital attributes with the hierarchical levels are an important determinant of wages. The relationship between wage growth and several career events is characterized, namely, the effects of demotions and different types of promotions on wage paths. The wage-career dynamics generates a U-shape to the wage premiums for promotions over the hierarchical ladder. In the context of the model discussed, this shape suggests a stronger employer learning and/or human capital accumulation effect at the bottom of the hierarchy and a stronger job assignment effect at the top