Cohort Effects in Promotions and Wages: Evidence from Sweden and the US
68 Pages Posted: 15 Jun 2011
Date Written: 2011
Abstract
This paper studies the long-term effects of the business cycle on workers’ future promotions and wages. Using the Swedish employer-employee matched data, we find that a cohort of workers entering the labor market during a boom gets promoted faster and reaches higher ranks. This pro-cyclical promotion cohort effect persists even after controlling for workers’ initial jobs, and explains at least half of the wage cohort effects that previous studies have focused on. We repeat the same analyses using personnel records from a single US company, and obtain the same qualitative results.
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