Abstract
Both the enterprise and salaried versions of the internal labour market model predict an important role for job specific tenure in the determination of employee earnings. This paper estimates earnings equations using data drawn from the 2005 wave of the Survey of Education and Training Experience (hereafter SETE) to test this idea. The paper finds considerable support for the presence of a job tenure effect, even after controlling for general labour market experience. The paper also seeks to determine if the strength of the tenure effect is related to skill level. The paper finds that the evidence for a tenure effect is strong across the broad spectrum of skill levels, except for the least skilled workers, where the job tenure earnings profile is noticeably flatter. This in turn suggests that internal labour markets have broad relevance across the whole of the skill spectrum, but with somewhat less importance for the least skilled workers.
Highlights
The concept of an internal labour market (ILM) was introduced by Clark Kerr (1950 and 1954) and John Dunlop (1957 and 1966) in the 1950s and 1960s
Enterprise ILMs were characterised by well defined job ladders, limited ports of entry towards the bottom of job ladders, promotion from within, seniority-based employment security rules, production processes that were heavily reliant on firm-specific skills, wages that were attached to jobs rather than individuals and a wage structure primarily determined by administrative rules linked to the logic of the internal job structure
Doeringer and Piore argued that www.ccsenet.org/ass these ideal-typical features of enterprise ILMs were most relevant to US blue-collar manufacturing workplaces they argued that many features were present in white-collar and managerial labour markets
Summary
The concept of an internal labour market (ILM) was introduced by Clark Kerr (1950 and 1954) and John Dunlop (1957 and 1966) in the 1950s and 1960s. The internal labor market is defined by an enterprise, or a part of an enterprise, or by a craft or professional community Doeringer and Piore (1971) discussed two types of ILMs, enterprise and craft but focussed on the former. Doeringer and Piore argued that www.ccsenet.org/ass these ideal-typical features of enterprise ILMs were most relevant to US blue-collar manufacturing workplaces they argued that many features were present in white-collar and managerial labour markets
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