Promotions and Wage Growth

Abstract

This article presents evidence that internal mobility, defined as a promotion or other position change, is an important source of wage growth. It accounts for approximately 15% of wage growth over the life cycle for white and black men, but less for women. The incidence of promotions and other position changes appears tied to the wage level: better paid workers are more likely to be promoted. The life-cycle incidence of internal mobility looks similar to that for conventionally defined job mobility. Most moves are made early in the career; mobility declines both with time in position, and with experience.