Internal Labor Markets Under External Market Pressures

Market Frictions and the Competitive Advantage of Internal Labor Markets

We show that frictions in labor and capital markets can be a source of competitive advantage for a¢ liates of corporate groups over standalone …rms in environments where bene…ts from internal markets’‡exibility are high. We argue that the advantage of ‡exibility in changing labor inputs is related to how di¢ cult it is to change capital inputs. We predict that if substituting labor with capital...

Large Firms and Internal Labor Markets

This paper introduces a model of internal labor markets that is consistent with the observed differences between workers in large and small firms with respect to wages and separation rates. In particular, firms constitute labor markets with no search frictions. Workers are free to move within a firm at no cost, whereas switching across firms is costly. If the quality of a match between a worker...

Managers, Mentoring, and Internal Labor Markets

We propose a theory of production and allocation of human capital in firms that focuses on the role of line managers, who both invest time to mentor junior employees, and acquire information about the juniors’abilities that is valuable for job assignments. We argue that this dual role of managers implies that internal labor markets and incentive contracts for managers must be determined jointly...

Internal Labor Markets and Manpower Analysis

Teacher Labor Markets and Teacher Labor Market Research

The research on teacher labor markets is quite large and expanding; yet, as in most areas of education research, our knowledge is full of holes and only gets us a little ways towards identifying productive policy directions. As such, there is plenty of room for new research – describing labor market dynamics, developing and substantiating theories about the mechanisms driving the trends and rel...