An ordered choice model of promotion rules

Abstract

This paper continues an important but short line of research investigating non-pecuniary outcomes of collective bargaining. These outcomes define the rules governing the employment relationship. The determinants of one of the most important of these rules — the one that governs the intrafirm allocation of labor — are analyzed. Specifically, micro-level data are used to estimate the determinants of promotion rules in major collective bargaining agreements in U.S. manufacturing. A multinomial choice model is estimated once these rules have been ordered along the joint dimension of increasing weight attached to seniority across a broadening seniority unit. The evidence suggests that contracts involving small, capital-intensive firms, whose technologies value specific training, in single-employer bargaining units, that contain an increasing proportion of men, are most likely to exhibit promotion rules that heavily weight company-wide seniority.