Abstract
This paper proposes a new measure for an organization’s internal career ladder. Analyzing job-to-job movements in LinkedIn profiles, we measure the extent to which an organization relies on internal versus external hiring. We then use this newly constructed measure to revisit the classic sociological question about the value of internal labor markets. Matching LinkedIn profiles of 446,058 U.S. inventors and tracking their performance from 2000 to 2025, we find that inventors are more productive when their employers have higher rates of internal promotion. However, this pattern largely disappears among inventors nearing the end of their careers, suggesting the importance of career advancement incentives. This study leverages LinkedIn data to provide new
evidence on the value of internal labor markets.