Electronic Thesis and Dissertation Repository

Degree

Doctor of Philosophy

Program

Economics

Supervisor

Dr. Audra Bowlus

Abstract

This thesis consists of three chapters in the field of labor economics related to worker promotion, hierarchical levels, and wage growth.

Chapter two examines the impact of the skill requirements of an occupation on the likelihood that a worker receives a promotion. Promotion data are taken from the National Longitudinal Survey of Youth 1979, while skill requirements data come from the Dictionary of Occupational Titles. I find that the higher the cognitive skill requirement of an occupation, and the lower the motor and strength skill requirements, the higher the probability that the worker receives a promotion. Introducing skill requirements reduces the effect of the worker's Armed Forces Qualification Test score on promotion, while it increases the gender gap in promotion.

Chapter three assesses the importance of hierarchical levels to skill accumulation and career outcomes by estimating an occupational choice model. Using labor market history data from the German Socio-Economic Panel, and task usage data from the German Qualification and Career Survey, I demonstrate that hierarchical level significantly impacts labor market outcomes and task usage within the occupation. To capture these features of the data, I build an occupational choice model with levels where workers accumulate both task-specific and occupation-specific human capital through learning-by-doing. I use indirect inference to estimate versions of the model with and without levels. Omitting hierarchical levels causes occupation-specific human capital to be underestimated in the blue-collar occupation, and task-specific human capital to be underestimated in the white-collar occupation. In the model with levels, eliminating occupation-specific skill accumulation reduces mean wage level by 16.6%, while eliminating task-specific skill accumulation results in a 29.8% reduction.

Chapter four is coauthored with Jed DeVaro and Antti Kauhanen. We investigate the theory that promotion serves as a signal of worker ability using the German Socio-Economic Panel and the Confederation of Finnish Industries. Controlling for worker performance using bonus data and performance-related-pay, we find that promotion probabilities are increasing in educational attainment whereas wage increases from promotion are decreasing in educational attainment for some educational groups, with both results stronger for first than for subsequent promotions. Women have lower promotion probabilities than men, though this difference dissipates after first promotions. Evidence of promotion signaling is stronger for within-firm than for across-firm promotions.

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