nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2011‒02‒19
eight papers chosen by
Tommaso Reggiani
Universita' di Bologna

  1. Economic Growth and The Quality of Human Capital By Laabas, Belkacem; Weshah, Razzak
  2. Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy By Stark, Oded; Hyll, Walter; Wang, Yong
  3. Job Matching Efficiency in Skilled Regions - Evidence on the Microeconomic Foundations of Human Capital Externalities By Daniel F. Heuermann
  4. Can a standardized aptitude test predict training success of apprentices? Evidence from a case study in Switzerland By Michael Siegenthaler
  5. Does high involvement management lead to higher pay? By Böckerman, Petri; Bryson, Alex; Ilmakunnas, Pekka
  6. Incentives in Merchant Empires: Portuguese and Dutch Labor Compensation By Rei, Claudia
  7. Working in family firms: less paid but more secure? Evidence from French matched employer-employee data By Andrea Bassanini; Thomas Breda; Eve Caroli; Antoine Rebérioux
  8. Monetary incentives vs. monitoring in addressing absenteeism: experimental evidence By Francesco D'Amuri

  1. By: Laabas, Belkacem; Weshah, Razzak
    Abstract: We calibrate an endogenous growth model to study the effect of the quality of human capital on productivity growth in a sample of thirty developed and developing countries for the period 1980 to 2007. We measure quality of human capital by relative cognitive skills. These are country scores in mathematics and science reported in Trends in International Mathematics and Science (TIMMS). The correlation between the relative quality of human capital and productivity growth is evident in the data for the developed countries. And, cross-country differences in the quality of human capital for a number of developed countries are highly positively associated with cross-country differences in productivity growth. The picture is significantly different for the developing countries in our sample.
    Keywords: quality of human capital; economic growth
    JEL: I20 J24 O40 E10
    Date: 2011–02–08
  2. By: Stark, Oded; Hyll, Walter; Wang, Yong
    Abstract: This paper considers a setting in which the acquisition of human capital entails a change of location in social space that causes individuals to revise their comparison groups. Skill levels are viewed as occupational groups, and moving up the skill ladder by acquiring additional human capital, which in itself is rewarding, leads to a shift in the individualâs inclination to compare himself with a different, and on average better-paid, comparison group, which in itself is penalizing. The paper sheds new light on the dynamics of human capital formation, and suggests novel policy interventions to encourage human capital formation in the aggregate and, at the same time, reduce inter-group income inequality.
    Keywords: Human capital formation, Skill levels as occupational groups, Interpersonal comparisons, Relative deprivation, Tax policy, Subsidization, Labor and Human Capital, D11, H24, H30, J24,
    Date: 2011–01
  3. By: Daniel F. Heuermann (Institute for Labour Law and Industrial Relations in the EC, University of Trier)
    Abstract: Inspired by the literature on the role of local career networks for the quality of labor market matches we investigate whether human capital externalities arise from a higher job matching efficiency in skilled regions. Using two samples of highly qualified workers in Germany we find that an increase in the regional share of highly qualified workers by one standard deviation is associated with between-job wage growth of about three percent and an increase in the annual probability of a job change of up to four percent. Wage gains are incurred only by workers changing jobs within industries. Consistently, workers in skilled regions are about fifty percent more likely to change jobs within rather than between industries. Taken together, these findings suggest that human capital externalities partly arise because workers in skilled regions have better access to labor market information, which allows them to capitalize on their industry-specific knowledge when changing jobs.
    Keywords: Human Capital Externalities, Job Matching
    JEL: D62 J24 J31 R11
    Date: 2011–01
  4. By: Michael Siegenthaler (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Due to a widely spread distrust in the signalling value of school grades, Swiss employers require external, standardized aptitude test results when recruiting new apprentices. However, the predictive quality of such test results has never been thoroughly researched. Therefore, this case study analyses whether external aptitude tests can improve the quality of predicting success in apprenticeship training. I find that such information is a) not correlated with school grades at the end of compulsory schooling but b) does not add information that would explain either the success in VET schooling (school grades in the first and second year of apprenticeship training), the probability of unexcused vocational school absences or the likelihood of a premature ending of the apprenticeship contract.
    Keywords: Apprenticeship, hiring, aptitude test, predictive validity, screening
    JEL: I21 J24 M51 M53
    Date: 2011–02
  5. By: Böckerman, Petri; Bryson, Alex; Ilmakunnas, Pekka
    Abstract: Using nationally representative survey data for Finnish employees linked to register data on their wages and work histories we find wage effects of high involvement management (HIM) practices are generally positive and significant. However, employees with better wage and work histories are more likely to enter HIM jobs. The wage premium falls substantially having accounted for employees’ work histories suggesting that existing studies’ estimates are upwardly biased due to positive selection into HIM. Results do not differ significantly when using propensity score matching as opposed to standard regression techniques. The premium rises with the number of HIM practices and differs markedly across different types of HIM practice.
    Keywords: wages; high involvement management; high performance work system; incentive pay; training; team working; information sharing; propensity score matching
    JEL: M53 J31 J24 M12 M54 J33 M52 M50
    Date: 2011–02–02
  6. By: Rei, Claudia
    Abstract: The different organizational structure of the Portuguese and Dutch merchant empires affected their ability to monitor workers. I test the theoretical implications of these differences using micro data of overseas workers' compensation from the sixteenth to the eighteenth century. The two merchant empires used significantly different compensation structures: working for the king of Portugal corresponded to a higher bonus share of compensation on average than that of the Dutch East India Company. These results are consistent with theoretical implications and provide additional support to the historical evidence we have on the organizational structure of merchant empires.
    Keywords: Merchant Empires; Labor Compensation; Incentives; Monitoring
    JEL: N34 J33
    Date: 2011–01
  7. By: Andrea Bassanini (ERMES - Equipe de recherche sur les marches, l'emploi et la simulation - CNRS : UMR7017 - Université Panthéon-Assas - Paris II, IZA - Institute for the Study of Labor - IZA, OECD - OECD); Thomas Breda (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Eve Caroli (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, EconomiX - CNRS : UMR7166 - Université de Paris X - Nanterre); Antoine Rebérioux (EconomiX - CNRS : UMR7166 - Université de Paris X - Nanterre)
    Abstract: We study the compensation package offered by family firms. Using matched employer-employee data for a sample of French establishments in the 2000s, we first show that family firms pay on average lower wages to their workers. This family/non-family wage gap is robust to controlling for several establishment and individual characteristics and does not appear to be due either to the differential of productivity between family and non-family firms or to unobserved establishment and individual heterogeneity. Moreover, it is relatively homogeneous across workers with different gender, educational attainment and age. By contrast, the family/non-family wage gap is found to be larger for clerks and blue-collar workers than for managers, supervisors and technicians, for whom we find no significant wage gap. As a second step, we investigate why workers stay in family firms while being paid less. We show that these firms offer greater job security. We find evidence that the rate of dismissal is lower in family than in non-family firms. We also show that family firms rely less on dismissals and more on hiring reductions when they downsize. These results are confirmed by subjective data: the perceived risk of dismissal is significantly lower in family firms than in non-family ones. We speculate that our results can be explained either by a compensating wage differential story or by a model in which workers sort in different firms according to their preferences.
    Keywords: family firms ; wages ; job security ; linked employer-employee data
    Date: 2010–11
  8. By: Francesco D'Amuri (Bank of Italy)
    Abstract: Exploiting two unexpected variations in sickness absence policy for civil servants in Italy, this paper assesses the relative importance of monitoring and monetary incentives in determining a basic measure of effort: presence at work. When stricter monitoring was introduced together with an average 20% cut in replacement rates for civil servants on short sick leave, sickness absence decreased by 26.4%, eliminating the wedge in absence rates with comparable private sector workers. The impact substantially decreased when a subsequent policy change brought back monitoring to the pre-reform level, while leaving monetary incentives untouched. Results are confirmed by a variety of robustness checks and are not driven by the presence of attenuation bias. No shift is detected in other types of absence as a consequence of the reforms. Given that sickness absence rates are higher in the public than in the private sector in the US and Western Europe as well, these results provide useful insights on how to draw a successful strategy for addressing absenteeism.
    Keywords: monetary incentives, monitoring, effort, sickness absence
    JEL: J32 J38 J45
    Date: 2011–01

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