The study of careers is an important component of microeconomic theory. Careers, after all, are closely linked to the structure and function of labor markets, and labor markets constitute a major factor of production considered in virtually all microeconomic theories of the firm (Bain, 1956; Chamberlin, 1933; Hirschleifer, 1980). Although considerable economic research focuses on careers, relatively little of this work provides insights for individual employees. When an employee wishes to be successful by organizational criteria, what should he or she do? This chapter develops a model of individual career strategy based on modern microeconomic theory, discusses the individual and organizational implications of this model, and proposes research questions for further study.

We begin by briefly reviewing neoclassical labor market theory. The perfectly competitive labor markets suggested by this theory offer employees little control over their career destiny. However, many economists recognize that labor markets rarely meet the conditions of perfect competition, and we next discuss several models that relax some of the restrictive conditions of perfect markets. These theories do not focus on prescription, but they do provide clues that point toward career strategies. Further, they cover many topics examined in noneconomic career research, including the processes by which employees search for and choose jobs, the ways in which employment relationships are managed, the personal and organizational investments that employees and firms make in careers, and the broader meaning of careers for society and the economy. Finally, building on the ideas provided by these economic theories, we propose a tentative model of individual career strategy, and discuss the implications of this model for individuals, organizations, and future career research.