Signaling and strategically delayed promotion

The paper highlights a link between signaling behavior and strategically delayed promotion. It is argued that the presence of a signaling device has a critical impact on the pace of promotion. In an equilibrium with signaling behavior, the labor market is more segmented and the pace of promotion is faster; in the other with no signaling behavior, the labor market is less segmented and the pace of promotion is slower. We argue that the former situation corresponds to the US economy while the latter corresponds to the Japanese economy.