nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2011‒03‒12
ten papers chosen by
Tommaso Reggiani
Universita' di Bologna

  1. Efficient redistribution policy: an analysis focused on the quality of institutions and public education By Elena Sochirca; Sandra Tavares Silva
  2. Gregariousness, Interactive Jobs and Wages By Friedhelm Pfeiffer; Nico Johannes Schulz
  3. Does High Involvement Management Lead to Higher Pay? By Alex Bryson; Petri Böckerman; Pekka Ilmakunnas
  4. Improving the Employment Rates of People with Disabilities through Vocational Education By Mavromaras, Kostas G.; Polidano, Cain
  5. Optimal growth and the golden rule in a two-sector model of capital accumulation By Mehdi Senouci
  6. Managerial Incentives and Favoritism in Promotion Decisions: Theory and Field Evidence By Berger, Johannes; Herbertz, Claus; Sliwka, Dirk
  7. Work Absenteeism Due to a Chronic Disease By Guy Lacroix; Marie-Ève Brouard
  8. Effect of Workforce Age on Quantitative and Qualitative Organizational Performance: Conceptual Framework and Case Study Evidence By Uschi Backes-Gellner; Martin R. Schneider; Stephan Veen
  9. Social Comparison in the Workplace: Evidence from a Field Experiment By Cohn, Alain; Fehr, Ernst; Herrmann, Benedikt; Schneider, Frédéric
  10. On the economic architecture of the workplace: Repercussions of social comparisons among heterogeneous workers By Stark, Oded; Hyll, Walter

  1. By: Elena Sochirca (Faculdade de Economia, Universidade do Porto); Sandra Tavares Silva (CEF.UP, Faculdade de Economia, Universidade do Porto)
    Abstract: In this work we intend to study how the quality of the institutional factor may influence the efficiency of redistribution policy specifically associated with human capital accumulation. We develop a conceptual discussion building on the importance of income redistribution for economic growth and the key role of political institutions in securing growth-enhancing redistribution policies. We introduce endogenous growth theory elements into our analysis by considering as a fundamental source of economic growth human capital accumulation, motivated by tax-financed education secured through efficient redistribution policies. We outline crucial insights on the underlying mechanisms, emphasizing however that extensive research on the subject is undoubtedly still required. In particular, we identify the main factors negatively affecting the decisive role of political institutions and, consequently, distorting efficient redistribution policy. We then define a political-economic equilibrium as a combination of intermediately strong state and efficient control-rights institutions, implying simultaneous protection from expropriation and implementation of efficient redistribution policy, conducive to sustained economic growth.
    Keywords: redistribution policy, human capital, institutions, taxation, public education, economic growth
    JEL: H23 E24 O43
    Date: 2011–03
  2. By: Friedhelm Pfeiffer; Nico Johannes Schulz
    Abstract: Gregariousness is an important aspect of human life with implications for labour market outcomes. The paper examines, to the best of our knowledge for the first time for Germany, gregariousness and social interaction at the workplace and associated wage differentials. Our empirical findings with samples from the German Socio-Economic Panel (SOEP) demonstrate that gregarious people more often work in jobs with social interaction. Furthermore, females tend to work more often in interactive jobs compared to males. There is evidence that working in an interactive job is associated with a compensating negative wage differential of 7 percent for women and non for men. Implications for wage policy are discussed.
    Keywords: Gregariousness, social interactions, labour markets, sorting, wage differentials
    JEL: J01 J24 J31
    Date: 2011
  3. By: Alex Bryson; Petri Böckerman; Pekka Ilmakunnas
    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, incentivepay, training, team working, information sharing, propensity score matching
    JEL: J24 J31 J33 M12 M50 M52 M53 M54
    Date: 2011–02
  4. By: Mavromaras, Kostas G. (NILS, Flinders University); Polidano, Cain (Melbourne Institute of Applied Economic and Social Research)
    Abstract: During the 2001-8 period, the employment rate of people with a disability remained remarkably low in most western economies, hardly responding to better macroeconomic conditions and favourable anti-discrimination legislation and interventions. Continuing health and productivity improvements in the general population are leaving people with disabilities behind, unable to play their role and have their share in the increasing productive capacity of the economy. This paper combines dynamic panel econometric estimation with longitudinal data from Australia to show that vocational education has a considerable and long lasting positive effect on the employment participation and productivity of people with disabilities.
    Keywords: employment, disabilities, productivity, vocational training, dynamic panel regression
    JEL: J14 I19 I29
    Date: 2011–03
  5. By: Mehdi Senouci (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)
    Abstract: We contribute to the literature on optimal growth in two-sector models by solving a Ram- sey problem with a concave utility function. The unique possible steady-state is independent of initial conditions and of the instantaneous utility function, but not of the discount rate, and is characterized by a wage-rental ratio depending solely on the technology of the capital sector. For an initially low-capital economy, we show that the wage-rental ratio increasingly converges to its balanced value during transition. If the consumption sector is relatively capital-intensive, the relative price of capital increases during transition. If the investment sector is relatively more capital-intensive, it decreases. We also prove that a negative shock on the subjective rate of impatience, that makes the social planner more patient, leads to an immediate positive jump in asset prices.
    Keywords: capital accumulation ; optimal growth ; golden rule ; two-sector models
    Date: 2011–02
  6. By: Berger, Johannes (University of Cologne); Herbertz, Claus (University of Cologne); Sliwka, Dirk (University of Cologne)
    Abstract: This paper investigates the effects of managerial incentives on favoritism in promotion decisions. First, we theoretically show that favoritism leads to a lower quality of promotion decisions and in turn lower efforts. But the effect can be mitigated by pay-for-performance incentives for managers who decide upon promotion. Second, we analyze matched employer-employee survey data with detailed firm level information on managerial incentive schemes and find that perceived promotion quality is indeed substantially higher when managers receive performance-related pay or participate in gain sharing plans.
    Keywords: incentives, favoritism, nepotism, tournaments
    JEL: J33 M51 M52 M54 J71
    Date: 2011–03
  7. By: Guy Lacroix; Marie-Ève Brouard
    Abstract: Research on health-related work absenteeism focuses primarily on moral hazard issues but seldom discriminates between the types of illnesses that prompt workers to stay home or seek care. This paper focuses on chronic migraine, a common and acute illness that can prove to be relatively debilitating. Our analysis is based upon the absenteeism of workers employed in a large Fortune-100 manufacturing firm in the United States. We model their daily transitions between work and absence spells between January 1996 up until December 1998. Only absence due to migraine and depression, its main comorbidity, are taken into account. Our results show that there is considerable correlation between the different states we consider. In addition, workers who are covered by the Blue Preferred Provided Organization tend to have shorter employment spells but also shorter migraine spells.
    Keywords: Migraine, absenteeism, insurance policies, transition models, unobserved heterogeneity
    JEL: I10 J32
    Date: 2011
  8. By: Uschi Backes-Gellner (Department of Business Administration, University of Zurich); Martin R. Schneider (Economic Department, University of Paderborn); Stephan Veen (Department of Business Administration, University of Zurich)
    Abstract: Field studies linking workforce age to performance tend to treat performance as one-dimensional and often focus on individual, not organizational performance. To analyze the effects of workforce age on organizational performance, we suggest treating performance as multi-dimensional with at least two output dimensions: quantity and quality. We provide a novel conceptual framework that borrows insights from multiple disciplines to better understand ageing phenomena in organizations. In particular, we build on psychological and medical studies showing that individual age has different effects on different cognitive capabilities. As a result we argue that workforce ageing may affect various performance dimensions, such as quantity and quality, in different, often opposite ways. In our empirical part we examine a unique dataset containing detailed court data over a time span of 19 years. We find that average workforce age is linked negatively to quantitative organizational performance but positively to qualitative organizational performance. Our findings suggest that future organizational studies should decompose performance at least along the quantity-quality dimension. Our theoretical framework helps to understand the different types of ageing effects and to derive itemized implications for changes in organizational performance. It also helps to reconcile contradictory findings of previous studies and to derive important managerial implications for task assignments, career policies, and company strategies in view of upcoming demographic changes in many developed countries.
    Keywords: ageing workforce, demographic change, organizational performance, age productivity effects
    JEL: J1 M51 J7
    Date: 2011–03
  9. By: Cohn, Alain (University of Zurich); Fehr, Ernst (University of Zurich); Herrmann, Benedikt (University of Nottingham); Schneider, Frédéric (University of Zurich)
    Abstract: We conducted a randomized field experiment to examine how workers respond to wage cuts, and whether their response depends on the wages paid to coworkers. Workers were assigned to teams of two, performed identical individual tasks, and received the same performance – independent hourly wage. Cutting both team members' wages caused a substantial decrease in performance. When only one team member's wage was cut, the performance decrease for the workers who received the cut was more than twice as large as the individual performance decrease when both workers' wages were cut. This finding indicates that social comparison processes among workers affect effort provision because the only difference between the two wage cut conditions is the other team member's wage level. In contrast, workers whose wage was not cut but who witnessed their team member's pay being cut displayed no change in performance relative to the baseline treatment in which both workers' wages remained unchanged, indicating that social comparison exerts asymmetric effects on effort.
    Keywords: compensation, fairness, field experiment, social comparison
    JEL: C93 J33 M53
    Date: 2011–03
  10. By: Stark, Oded; Hyll, Walter
    Abstract: We analyze the impact on a firm’s profits and optimal wage rates, and on the distribution of workers’ earnings, when workers compare their earnings with those of co-workers. We consider a low-productivity worker who receives lower wage earnings than a high-productivity worker. When the low-productivity worker derives (dis)utility not only from his own effort but also from comparing his earnings with those of the high-productivity worker, his response to the sensing of relative deprivation is to increase the optimal level of effort. Consequently, the firm’s profits are higher, its wage rates remain unchanged, and the distribution of earnings is compressed.
    Keywords: Social comparisons; Heterogeneous workforce; Relative deprivation; Effort exertion; Earnings gap; Earnings compression
    JEL: D21 J31 J22 J24 M54 D01
    Date: 2011

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