| Abstract: |
Based on a rich personnel data set of a large university we .nd 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 modi.ed 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 .nd that administrative rigidities play an important
role in explaining promotion dynamics. |