Article

January 2014

Job promotion in midcareer: gender, recession, and “crowding”

Data from the National Longitudinal Survey of Youth 1979 indicate that, between 1996 and 2010, women, on average, lost some of the promotion momentum they had achieved at the beginning of midcareer, although they outperformed men in this regard. For both genders, the economic downturn of 2001 and the Great Recession of 2007–2009 contributed to reduced promotion probabilities. In the case of women, however, cohort effects, rather than the business cycle, seem to explain the promotion experience during the Great Recession. Promotions translate into higher real-wage increases, especially when coupled with growth in job responsibilities. Crowding effects, if not necessarily a thing of the past, are no longer manifested in reduced female promotion rates or earnings.

In an article published in the Monthly Labor Review in 1999, Deborah Cobb-Clark and Yvonne Dunlop investigated the role of gender in job promotions with the use of National Longitudinal Survey of Youth 1979 (NLSY79) data for 1989–1990 and 1996.1 The authors concluded that, although the qualitative characteristics of promotions appeared to be much the same for men and women, there was clear evidence of a gender gap in promotion that favored men at the start of the period. Nevertheless, this gap was markedly smaller by 1996.2 The sample examined by Cobb-Clark and Dunlop comprised workers at the beginning of their careers. By contrast, the present study analyzes these workers’ promotion prospects first in 1996 and then in subsequent years of the survey, ending in 2010. The use of subsequent rounds of the NLSY79 can reveal whether the promotion patterns observed in early career apply in the case of workers in mid- and peak career.

Cobb-Clark and Dunlop also considered the role of the business cycle in the promotion process.3 They found scant evidence that either industry employment growth or local labor market conditions played a role in determining promotion rates. However, the present article, whose sample period ends in 2010, allows for an expanded investigation in which one can study the effects of the 2001 economic downturn and also examine whether more substantive changes in promotion patterns were occasioned by the 18-month Great Recession. (According to the National Bureau of Economic Research, the recession began in December 2007 and ended in June 2009.)

Finally, in contextualizing their approach, Cobb-Clark and Dunlop noted that differential opportunities for promotion might reflect occupational segregation, also known as crowding, implicit in notions of “women’s work.” However, the authors did not examine whether gender differences in promotion and other labor market outcomes—most notably wages—were influenced by crowding effects.4 This article provides some evidence on this topic as well.

Apart from offering new perspectives on midcareer, major recession, and occupational segregation, the present treatment follows Cobb-Clark and Dunlop’s approach to examining the role of gender in the promotion process. Accordingly, the treatment focuses on the characteristics of promotion and on who gets promoted.

The data

The data used in this study are taken mainly from the 1996, 2006, and 2010 rounds of the NLSY79.5 The survey, which is sponsored by the Bureau of Labor Statistics and was initiated in 1979, provides a nationally representative panel of data for the cohort of individuals who were 14 to 22 years of age in that year. For those rounds of the survey that are of interest here, there are no oversamples of poor Whites and those in the military; however, in addition to the core cohort, there are oversamples of Blacks and Hispanics. Each of these cohorts is retained and sampling weights are used to adjust the summary statistics throughout the article. The analysis excludes those individuals who were self-employed or who worked without pay. Indeed, the focus is on those individuals who have worked in the previous calendar year and who were working at least 30 hours a week at the time of the interview. The sample used to analyze the wage increases resulting from promotions is further restricted to those who have worked more than 35 hours a week. This restriction is imposed to exclude wage increases caused by transitions between part-time and full-time jobs. Moreover, the wage analysis includes only individuals who have not changed employers since the date of last interview. This filter is applied to avoid the inclusion of those displaced workers who, upon reemployment, are both underemployed in the new job (and receive lower wages than the wages reported on the date of last interview) and overqualified for it (and more likely to be promoted). In short, the analysis seeks to eliminate promotions associated with wage decreases.

Notes

1 Deborah A. Cobb-Clark and Yvonne Dunlop, “The role of gender in job promotions,” Monthly Labor Review, December 1999, pp. 22–38.

2 The narrowing of the gender gap in promotions has been charted in most studies of the phenomenon, even though the implications of gender for earnings have been contested. For an extensive review of the empirical literature, see John T. Addison, Orgul Demet Ozturk, and Si Wang, “Promotion and pay: gender, unionism, and sector,” discussion paper 6873 (Bonn: Institute for the Study of Labor, September 2012).

3 The evidence on the role of macroeconomic conditions in the promotion process is sparse. (See, for example, James E. Rosenbaum, “Organizational career mobility: promotion chances in a corporation during periods of growth and contraction,” American Journal of Sociology, July 1979, pp. 21–48.) However, there has recently occurred an explosion of interest in the related theme of wage behavior over the business cycle. For a state-of-the-art treatment of the topic, see Anabela Carneiro, Paulo Guimarães, and Pedro Portugal, “Real wages and the business cycle: accounting for worker, firm, and job title heterogeneity,” American Economic Journal: Macroeconomics, April 2012, pp. 133–152.

4 On the crowding hypotheses, see Barbara R. Bergmann, “Occupational segregation, wages and profits when employers segregate by race and sex,” Eastern Economic Journal, April/July 1974, pp. 103–110. The key empirical analyses on wages are Francine D. Blau and Andrea H. Beller, “Trends in earnings differentials by gender, 1971–1981,” Industrial and Labor Relations Review, July 1988, pp. 513–529; Elaine Sorensen, “The crowding hypothesis and comparable worth,” Journal of Human Resources, winter 1990, pp. 55–89; Barry Gerhart and Nabil El Cheikh, “Earnings and percentage female: a longitudinal study,” Industrial Relations, winter 1991, pp. 62–78; Erica L. Groshen, “The structure of the female/male differential: is it who you are, what you do, or where you work?” Journal of Human Resources, summer 1991, pp. 457–472; and Elizabeth A. Paulin and Jennifer M. Mellor, “Gender, race, and promotion within a private-sector firm,” Industrial Relations, April 1996, pp. 276–295.

5 Note that the discussion of the effects of the business cycle on promotions presents information on all survey rounds.

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About the Author

John T. Addison
ecceaddi@moore.sc.edu

John T. Addison is professor of economics at the University of South Carolina and professor of economics at Durham University, U.K.

Orgul Demet Ozturk
odozturk@moore.sc.edu

Orgul Demet Ozturk is assistant professor of economics at the University of South Carolina.

Si Wang
si.wang@moore.sc.edu

Si Wang recently completed her Ph.D. degree in economics at the University of South Carolina.