9414398 Lazear For almost thirty years now, human capital theory has been the main theoretical model behind most empirical work in labor economics. But human capital theory is primarily a supply-side approach that focuses on the characteristics and skills of the individual workers. It pays far less attention to the environment in which workers work. The entire notion of a "job" which seems central to the thinking of businesspersons and administrators, is virtually absent from most labor market analyses. The project addresses this deficiency in human capital theory. The work is conducted at the theoretical and empirical level. Tournament theory will be extended to determine how firms set up their hierarchical structures. The investigator has already lined up firms that will supply the type of detailed personnel and payroll records needed to provide answers to questions about the positions in which labor is used. They include firms from the financial services industry, an energy producer, and a durable goods manufacturer. The empirical part of the study will be devoted to collecting and examining these data. This project focuses on questions that rely on the importance of jobs as the unit of analysis. The general questions are, "Do jobs matter?" and "Do firms behave as if they have some reasonably well-defined idea of slots in mind when they make decisions?" Some of the specific questions are: 1. Jobs and Wages: Do jobs determine wages or do individual's characteristics determine wages? It has been argued that once occupation and industry is held constant, there is little male-female wage differential. Is the same true for all human capital variables like education and prior experience? 2. Jobs and Turnover: It is well-known that workers have different turnover rates as a function of demographic characteristics and tenure with the firm. But jobs may have different turnover rates, independent of the incumbents. How important are demographic effects in sorting individuals into jobs with different turnover rates? 3. Careers: Is there a real distinction between "line" jobs, which are supposed stepping stones to the higher echelons of the firm, and "staff" jobs, which are technical, sometimes highly compensated, but generally dead-end positions? How do background variables such as race and sex affect initial job assignments? 4. Promotion: What determines promotion decisions? Are workers who remain in a job for long periods of time the most productive because long tenure is evidence of a good match between jobs and skills or the least productive since the best workers get promoted out early?