Career paths in hierarchies: Theory and evidence from Chinese officials

This paper studies the dynamic patterns of job durations in a hierarchical government. Using a large dataset of Chinese officials from 1994 to 2017, we find systematic evidence that the promotion rates of officials at different levels of government are negatively correlated, contrary to the common finding of fast track in the literature. To characterize the career paths in hierarchies, we develop a dynamic model of optimal job assignments with symmetric learning. The model highlights the role of seniority in coping with the Type-II error, that is, the risk of over-evaluating an official’s ability. Only very capable officials are spared, and the fast track applies; relatively capable officials are subject to the over-evaluation risk, and their job durations are negatively correlated across levels of government. A negative correlation is also more likely to happen when the controller is more risk averse, which may explain mixed findings in the literature.