Internal Labor Markets

This paper undertakes a selective review of theoretical and empirical studies of internal labor markets (ILMs). Three different conceptualizations of ILMs are identified in existing literature: (a) ILMs as all jobs within a firm; (b) variable describing firms or present in discrete clusters of jobs within firms; (c) and a phenomenon present in some occupational labor markets within and across firms. Some empirical research using each conceptualization is described. Evidence apropo sseveral arguments about the theoretical origins of ILMs is assessed and some topics of future research are indicated. This review documents the absence of consensus about the characteristics defining the 1LM concept; a resulting diversity of approaches to the measurement or location of ILMs further hinders both accumulation of findings and the comparative study of ILMs. The most promising of the theoretical origins of ILMs relates scarcities of highly skilled workers to job structures generating increasing skill and knowledge among workers.