THE INTERNAL ECONOMICS OF THE FIRM - EVIDENCE FROM PERSONNEL DATA

We analyze twenty years of personnel data from one firm. The hierarchi cal structure is quite simple and stable. Career movements suggest tha t the employee's rate of learning and the firm's learning about abilit y are important. There are promotion ''fast tracks.'' Exit rates vary little with tenure or salary. The firm has personnel policies like tho se described in the internal labor markets literature, although severa l theoretical preconditions for ILMs, such as ports of entry and exit, are lacking. Job levels are important to compensation, but there is a lso substantial individual variation in pay within levels. Our compani on paper (in this issue) explores the wage policy of this firm.