Career Spillovers in Internal Labor Markets

71 Pages Posted: 26 Oct 2019 Last revised: 12 Mar 2021

See all articles by Nicola Bianchi

Nicola Bianchi

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER)

Giulia Bovini

Bank of Italy

Jin Li

Faculty of Business and Economics, The University of Hong Kong

Matteo Paradisi

Harvard University

Michael Powell

Northwestern University - Kellogg School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: March 11, 2021

Abstract

This paper studies career spillovers across workers, which arise in firms with limited promotion opportunities. We exploit a 2011 Italian pension reform that unexpectedly tightened eligibility criteria for the public pension, leading to sudden, substantial, and heterogeneous retirement delays. Using administrative data on Italian private-sector workers, the analysis leverages cross-firm variation to isolate the effect of retirement delays among soon-to-retire workers on the wage growth and promotions of their colleagues. We find evidence of spillover patterns consistent with older workers blocking the careers of their younger colleagues. These effects are present only in firms with limited promotion opportunities.

Keywords: wage growth, promotions, internal labor markets, pension reform

JEL Classification: M51, M52, J21, J26, J31

Suggested Citation

Bianchi, Nicola and Bovini, Giulia and Li, Jin and Paradisi, Matteo and Powell, Michael, Career Spillovers in Internal Labor Markets (March 11, 2021). Available at SSRN: https://ssrn.com/abstract=3470761 or http://dx.doi.org/10.2139/ssrn.3470761

Nicola Bianchi (Contact Author)

Northwestern University - Kellogg School of Management ( email )

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National Bureau of Economic Research (NBER)

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Giulia Bovini

Bank of Italy ( email )

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Jin Li

Faculty of Business and Economics, The University of Hong Kong ( email )

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Hong Kong, Pokfulam HK
Hong Kong

Matteo Paradisi

Harvard University ( email )

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Cambridge, MA 02138
United States

Michael Powell

Northwestern University - Kellogg School of Management ( email )

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Evanston, IL 60208
United States

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