Specificity of Human Capital and Promotions

Abstract

This paper analyzes firms’ hiring and promotion patterns in each job rank within firms, and infers the relative significance of firm- and occupation-specific human capital. The results suggest that firm- and occupation-specific skills are equally valuable for tasks in each job rank, and that the significance of each increases with job rank, but that there exists a large amount of heterogeneity across occupations. This paper also shows that the lengths of firm- and occupation-tenure are very noisy measures of firm- and occupation-specific human capital, and contrasts our results with those from other recent studies on the returns of firm- and occupation-tenure.