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The Internal Economics of a University - Evidence from Personnel Data

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  • Verboven, Frank
  • Haeck, Catherine

Abstract

Based on a rich personnel data set of a large university we find strong evidence for the existence of an internal labor market. First, the lowest academic rank is a strong port of entry and the highest rank is a port of exit. Second, wages do not follow external wage developments, since they follow administrative rules that have not been modified for a long time. We subsequently look at internal promotion dynamics to assess the relevance of alternative internal labor market theories. A unique feature of our data is that we have good measures of performance. Consistent with incentive theories of internal labor markets, research and teaching performance turn out to be crucial determinants of promotion dynamics. Learning theories of internal labor markets appear to have support when we do not account for observed performance, but the evidence becomes much weaker once we control for performance. Finally, we find that administrative rigidities play an important role in explaining promotion dynamics.

Suggested Citation

  • Verboven, Frank & Haeck, Catherine, 2010. "The Internal Economics of a University - Evidence from Personnel Data," CEPR Discussion Papers 7843, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:7843
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    Cited by:

    1. Karachiwalla, Naureen & Park, Albert, 2017. "Promotion incentives in the public sector: Evidence from Chinese schools," Journal of Public Economics, Elsevier, vol. 146(C), pages 109-128.
    2. Courty, Pascal & Sim, John, 2012. "What is the cost of retaining and attracting exceptional talents? Evidence from the Canada Research Chair program," CEPR Discussion Papers 8966, C.E.P.R. Discussion Papers.
    3. Brösamle, Klaus J & Nordström Skans, Oskar, 2011. "Paths to higher office: evidence from the Swedish Civil Service," Working Paper Series, Center for Labor Studies 2011:17, Uppsala University, Department of Economics.
    4. Pascal Courty & John Sim, 2015. "Retention of talented academic researchers: Evidence from a government intervention," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(5), pages 1635-1660, December.
    5. Geys, Benny & Heggedal, Tom-Reiel & Sørensen, Rune J., 2017. "Are bureaucrats paid like CEOs? Performance compensation and turnover of top civil servants," Journal of Public Economics, Elsevier, vol. 152(C), pages 47-54.
    6. Zhang, Haifeng & Zhang, Junsen & Zhang, Yanfeng, 2019. "Do tournament incentives matter in academics? Evidence from personnel data in a top-tier university in China," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 84-106.
    7. Juho Jokinen & Jaakko Pehkonen, 2017. "Promotions and Earnings – Gender or Merit? Evidence from Longitudinal Personnel Data," Journal of Labor Research, Springer, vol. 38(3), pages 306-334, September.
    8. Stracke, Rudi & Sunde, Uwe, 2014. "Dynamic Incentive Effects of Heterogeneity in Multi-Stage Promotion Contests," IZA Discussion Papers 8368, Institute of Labor Economics (IZA).
    9. Erina Ytsma, 2022. "Effort and Selection Effects of Performance Pay in Knowledge Creation," CESifo Working Paper Series 10153, CESifo.

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    More about this item

    Keywords

    Career dynamics; Incentives; Learning; Personnel economics;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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