DP1622 | Fast Track: Is it in the Genes? The Promotion Policy of a Large Japanese Firm

Publication Date

30/04/1997

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Abstract

This paper studies the promotion policy of a large, hi-tech manufacturing Japanese firm. We find that the company has multiple ports of entry and hires a significant number of employees with previous job experience. In addition, cohort-peer differentiation in promotion starts much earlier than predicted by the common view, and there are clear signs of fast-track effects, so that individuals promoted faster earlier are more likely to be promoted faster later on. Fast-track effects are not in the genes, because they survive even after controlling for time-invariant individual effects, such as innate individual ability. The last result is difficult to justify using a pure learning model, where ability is time invariant, so that a richer learning model, incorporating, say, human capital considerations, is clearly required.