Human Capital and Career Success: Evidence from Linked Employer-Employee Data

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 12.03.2013, 12:15 - 13:30


Presentation by 

Takao Kato (Colgate University)


Individuals acquire general human capital through formal schooling. However, human capital acquisition does not stop upon graduation. Workers continue to accumulate human capital on the job. Such on-the-job training can be rather narrow in its scope and workers remain mostly within the same field. It is, however, also possible that workers experience diverse fields and become “generalists.” By using Denmark’s registry data, we provide fresh evidence on the role of such different types of human capital in worker’s career success, defined as appointments to top executive positions. The Danish registry data provide accurate and complete career histories (most importantly annual longitudinal data on which firm each worker works for and what role she plays in the firm) along with detailed personal characteristics for the population of Danish workers. As such, unlike prior studies, we are able to define the contestant pool flexibly and realistically, taking into consideration not only internal but also external candidates. We find that: (i) broadening the scope of human capital by experiencing diverse roles is indeed advantageous for career success; (ii) initial human capital earned through formal schooling and subsequent human capital obtained informally on the job are complements in the production of career success; and (iii) it is more beneficial to broaden the scope of human capital within the firm than without, pointing to the significance of firm-specific human capital for career success.

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