workers are assumed to come from a group with lower average ability. Their promotion is hypothesized to signal a larger … positive assessment of their ability than for more highly educated workers for whom promotion is expected. Promotions for … younger workers, with less known about their abilities, should also result in strong signaling effects. We find results in …

This paper examines the disincentive effects of perceived underpayment on individuals’ exerted effort and promotion. To … promotion, the difference between perceived and actual income has a smaller negative effect on the actual effort invested in …