Prestige, promotion, and pay

Daniel Ferreira and Radoslawa Nikolowa

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: job prestige; professional careers; financial service firms (search for similar items in EconPapers)
JEL-codes: G20 L20 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2024-02-01
New Economics Papers: this item is included in nep-bec, nep-hrm, nep-lab and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Journal of Finance, 1, February, 2024, 79(1), pp. 505 - 540. ISSN: 0022-1082

Downloads: (external link)
http://eprints.lse.ac.uk/118369/ Open access version. (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:118369

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().