PROMOTIONS, JOB SENIORITY, AND PRODUCT DEMAND EFFECTS ON EARNINGS

This paper investigates the relationship between promotion status, job tenure, product demand, and earnings utilising a matched employer-emp loyee sample which gives direct information on individuals' promotion prospects. Promotion status is modelled as an endogenous variable, sub ject to an initial job choice. Then the effect of job tenure and produ ct demand on earnings level is investigated. It is found that the earn ings of the individuals employed in jobs with promotion prospects are not only higher compared with the remainder but also unaffected by any decrease in product demand.