Does Working with a Future Executive Make Junior Employees More Likely to Be Promoted?

Abstract

We estimate long-term peer effects in the workplace by investigating whether working with a future executive in the early stages of a junior employee`s career will make them more likely to be promoted in the future. Using the data for comprehensive career history at the Japanese central administration, from 1946 to 2019, we find that long-term peer effects are substantial and persistent: Junior employees who work with a future executive in the same division during the first few years of their employment are promoted significantly faster, on average, than employees who do not work with a future executive. They are also more likely to be promoted to the executive level in the future. Additional empirical analysis suggests that improved network connections between senior and junior employees are crucial for the promotion of junior employees in the future.