1995 Reports

Educational credentials and promotion prospects in a Japanese and an American organization

Ishida, Hiroshi; Kuo-Hsien, Su; Spilerman, Seymour

This study examines the process of career advancement among college-graduate employees in a Japanese and an American firm. It focuses on the question of how the chances of promotion are affected by the ranking or quality of educational institutions previously attended by the employees and the specialization in college. The data come from detailed employment records of career-track employees in a large Japanese and American organization in the financial and insurance sector. We examine the rate of promotions to various levels within the organizational hierarchy using the event history analysis technique. Although the effects of college quality and major on socio-economic attainment have been reported in previous studies, this study shows that their effects on promotion prospects within an organization depend on the levels of organizational hierarchy. The study concludes with a discussion of different interpretations of the effect of college quality and of how educational credentials are utilized in promotion decisions by employers in the two organizations.