Internal Labor Market

We identify that in team production settings, peer performances increase as they are exposed over time to superstars, indicating a positive dynamic spillover effect. Moreover, these spillovers are observed in the skill dimensions of peers that complement those of the superstars.

In a firm with multiple hierarchical levels, we find that managers are incentivized to engage in talent hoarding. While managerial bonuses and job rotation policies may prevent talent hoarding, the existence of a subset of more visible workers could increase the likelihood of talent hoarding.