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Effort‐based career opportunities and working time

Author

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  • Massimiliano Bratti
  • Stefano Staffolani

Abstract

Purpose - The purpose of this paper is to describe the hypothesis of effort‐based career opportunities as a situation in which profit maximising firms create incentives for employees to work longer hours than the bargained ones, by making career prospects depend on working hours. The paper aims to test some implications of this hypothesis using UK data. Design/methodology/approach - The empirical analysis uses the British Household Panel Survey (BHPS) and panel data estimators to investigate the existence of a robust correlation between working hours and workers' expected probability of promotion in the current job. Findings - The analysis shows the existence of a robust positive correlation between working time and workers' expected likelihood of promotion in the BHPS data even when controlling for several individual characteristics and for workers' unobserved heterogeneity. Research limitations/implications - Although the paper uses panel data, the BHPS does not allow for the identification of the firms in which individuals work, and therefore to control for firm fixed effects. Employer‐employee datasets would have allowed a better assessment of the hypothesis. Originality/value - The paper provides a theoretical explanation for the empirically observed positive association between working time and expected promotion probability and, unlike previous papers that used pooled OLS estimates, it exploits the panel structure of BHPS data to control for individual unobserved heterogeneity.

Suggested Citation

  • Massimiliano Bratti & Stefano Staffolani, 2007. "Effort‐based career opportunities and working time," International Journal of Manpower, Emerald Group Publishing Limited, vol. 28(6), pages 489-512, September.
    • Handle: RePEc:eme:ijmpps:v:28:y:2007:i:6:p:489-512
    DOI: 10.1108/01437720710820017
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    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
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    9. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
    10. Landers, Renee M & Rebitzer, James B & Taylor, Lowell J, 1996. "Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms," American Economic Review, American Economic Association, vol. 86(3), pages 329-348, June.
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    Cited by:

    1. Mario Bossler & Philipp Grunau, 2020. "Asymmetric information in external versus internal promotions," Empirical Economics, Springer, vol. 59(6), pages 2977-2998, December.
    2. Argyro Avgoustaki & Almudena Cañibano, 2020. "Motivational Drivers of Extensive Work Effort: Are Long Hours Always Detrimental to Well‐being?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(3), pages 355-398, July.
    3. Fernando Lozano, 2010. "Understanding the workweek of foreign born workers in the United States," Review of Economics of the Household, Springer, vol. 8(1), pages 83-104, March.
    4. Roberto ESPOSTI & Pierpaolo PIERANI, 2005. "Price, Private Demand and Optimal Provision of Public R&D in Italian Agriculture," Working Papers 238, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    5. Alexis Ioannides & Eleni Oxouzi & Stavros Mavroudeas, 2014. "All work and no … pay? Unpaid overtime in Greece: determining factors and theoretical explanations," Industrial Relations Journal, Wiley Blackwell, vol. 45(1), pages 39-55, January.
    6. Renato BALDUCCI, 2005. "Public Expenditure and Economic Growth. A critical extension of Barro's (1990) model," Working Papers 240, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    7. Anger, Silke, 2008. "Overtime Work as a Signaling Device," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 55(2), pages 167-189.
    8. Stefania BUSSOLETTI & Roberto ESPOSTI, 2004. "Regional Convergence, Structural Funds and the Role of Agricolture in the EU. A Panel-Data Approach," Working Papers 220, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

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    More about this item

    Keywords

    Careers; Career development; Hours of work; Promotion; United Kingdom;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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