Internal and External Labor Markets: A Personnel Economics Approach / Edward P. Lazear, Paul Oyer.

Format:

Book

Author/Creator:

Lazear, Edward P.

Contributor:

National Bureau of Economic Research.

Oyer, Paul.

Series:

Working Paper Series (National Bureau of Economic Research) no. w10192.

NBER working paper series no. w10192

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Internal and External Labor Markets

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2003.

Summary:

Internal labor markets are those where workers are hired into entry level jobs and higher levels are filled from within. Wages are determined internally and may be quite free of market pressure. External labor markets imply that workers move somewhat fluidly between firms and wages are determined by some aggregate process where firms do not have significant discretion over wage setting. There are a number of theories that lead to internal labor markets. Using data from Sweden from the late 1980s, it is found that although there is significant evidence of internal promotion being important, a significant external market exists that affects both wage setting and hiring patterns. Even in Sweden, which most would not choose as the best example of a free labor market, external factors seem to create strong discipline on the ability of firms to set wages.

Notes:

Print version record

December 2003.