Effort‐based career opportunities and working time

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.