Internal labor market dimensions and labor productivity

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


Personnel economics tends be based on single-firm case studies. Here, we examine several internal labor market dimensions of nearly 5,000 firms, over a period of 20 years, using detailed matched employer–employee data from Portugal. In the spirit of Baker, Gibbs, and Holmstrom (1994a, 1994b), we consider worker turnover, the role of job levels and human capital as wage determinants, wage dispersion within job levels, the importance of tenure in promotions and exits, and the scope for careers. We find a large degree of diversity in most of these personnel dimensions across firms. Moreover, some dimensions are shown to be robust predictors of firm performance, even after controlling for time-invariant firm heterogeneity and other variables. These dimensions include low worker churning, the importance of careers, low wage dispersion at low and intermediate job levels, and a tight relationship between human capital variables and wages.

Original languageEnglish
Title of host publicationResearch in Labor Economics
Subtitle of host publicationWorkplace Productivity and Management Practices
EditorsSolomon W. Polachek, Konstantinos Tatsiramos, Giovanni Russo, Gijs van Houten
PublisherEmerald Group Holdings Ltd.
Number of pages31
ISBN (Electronic)978-1-80117-674-3
ISBN (Print)978-1-80117-675-0
Publication statusPublished - 7 Dec 2021

Publication series

NameResearch in Labor Economics
ISSN (Print)0147-9121


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