Ferreira, Daniel ORCID: 0000-0003-4590-8429 and Nikolowa, Radoslawa
(2024)
Prestige, promotion, and pay.
Journal of Finance, 79 (1).
505 - 540.
ISSN 0022-1082
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Text (Prestige__Promotion__and_Pay-Accepted version)
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Abstract
We develop a theory in which financial (and other professional services) firms design career structures to “sell” prestigious jobs to qualified candidates. Firms create less prestigious entry-level jobs, which serve as currency for employees to pay for the right to compete for the more prestigious jobs. In optimal career structures, entry-level employees (“associates”) compete for better-paid and more prestigious positions (“managing directors” or “partners”). The model provides new implications relating job prestige to compensation, employment, competition, and the size of the financial sector.
| Item Type: | Article |
|---|---|
| Official URL: | https://onlinelibrary.wiley.com/journal/15406261 |
| Additional Information: | © 2023 American Finance Association |
| Divisions: | Finance |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance H Social Sciences |
| JEL classification: | G - Financial Economics > G2 - Financial Institutions and Services > G20 - General L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General |
| Date Deposited: | 09 Mar 2023 11:30 |
| Last Modified: | 12 Dec 2024 03:38 |
| URI: | http://eprints.lse.ac.uk/id/eprint/118369 |
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