nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2011‒08‒09
thirteen papers chosen by
Tommaso Reggiani
Universita' di Bologna

  1. A model of longevity, human capital and growth By Oscar Iván AVILA MONTEALEGRE
  2. Field Experiments with Firms By Oriana Bandiera; Iwan Baranky; Imran Rasul
  3. Factors Affecting job satisfaction of employees in Pakistani banking sector By Ahmed Imran, Hunjra; Muhammad Irfan, Chani; Sher, Aslam; Muhammad, Azam; Kashif-Ur, Rehman
  4. Why training older employees is less effective By Zwick, Thomas
  5. Entrepreneurial Finance Meets Organizational Reality: Comparing Investment Practices And Performance Of Corporate And Independent Venture Capitalists By Zur Shapira; Gary Dushnitsky
  6. The Feasibility and Importance of Adding Measures of Actual Experience to Cross-Sectional Data Collection By Blau, Francine D.; Kahn, Lawrence M.
  7. Separating wheat and chaff: age-specific staffing strategies and innovative performance at the firm level By Frosch, Katharina; Göbel, Christian; Zwick, Thomas
  8. When Does Regulation Bite? Co-Determination and the Nature of Employment Relations By Uschi Backes-Gellner; Jens Mohrenweiser; Kerstin Pull
  9. Intrinsic work motivation and pension reform acceptance By Heinemann, Friedrich; Hennighausen, Tanja; Moessinger, Marc-Daniel
  10. And I Will Try to Fix You: A Study of Heterogeneity in Job Satisfaction with Implications for Flexible Employment Contracts By Chongvilaivan, Aekapol; Powdthavee, Nattavudh
  11. Overconfidence Increases Productivity By Yusuke Kinari; Noriko Mizutani; Fumio Ohtake; Hiroko Okudaira
  12. Severance Pay Mandates: Firing Costs, Hiring Costs, and Firm Avoidance Behaviors By Parsons, Donald O.
  13. Taxation and Regulation of Bonus Pay By Timothy Besley; Maitreesh Ghatak

    Abstract: Long run economic growth and its transitional dynamics are determined in a general equilibrium model of endogenous longevity, human capital and growth. Agents in overlapping generations survive safely for the first two periods of life and face an endogenous probability of surviving for a third period. Given this probability, each agent maximizes her expected lifetime utility choosing consumption, and the quantity of resources destined to her child’s education and health. Human capital accumulation depends on education and health expenditures and on parent’s human capital. The model produces two kinds of equilibriums, one with high life expectancy, human capital and GDP, and the other with low high life expectancy, human capital and GDP. These predictions accord with the empirical evidence on demographic transitions and development.
    Date: 2010–11–03
  2. By: Oriana Bandiera; Iwan Baranky; Imran Rasul
    Abstract: We discuss how the use of field experiments sheds light on long standing research questions relating to firm behavior. We present insights from two classes of experiments: within and across firms, and draw common lessons from both sets. Field experiments within firms generally aim to shed light on the nature of agency problems. Along these lines, we discuss how field experiments have provided new insights on shirking behavior, and the provision of monetary and non-monetary incentives. Field experiments across firms generally aim to uncover firms' binding constraints by exogenously varying the availability of key inputs such as labor, physical capital, and managerial capital. We conclude by discussing some of the practical issues researchers face when designing experiments and by highlighting areas for further research.
    Keywords: field experiments, firms, organizations
    JEL: C5 M5
    Date: 2011–07
  3. By: Ahmed Imran, Hunjra; Muhammad Irfan, Chani; Sher, Aslam; Muhammad, Azam; Kashif-Ur, Rehman
    Abstract: The job satisfaction has got tremendous attention in organizational research. The focus of this study is to determine the impact of various human resource management practices like job autonomy, team work environment and leadership behavior on job satisfaction. It also investigates the major determinants of job satisfaction in Pakistani banking sector. This study further evaluates the level of difference in job satisfaction among male and female employees. The sample of the study consisted of 450 employees working in different banks of Rawalpindi, Islamabad and Lahore through the questionnaire, of which 295 were returned and processed. SPSS was used to analyze the data, using Independent Sample T Test, Correlation and regression analysis. There is a positive and significant link between job satisfaction and human recourse management practices like team work environment, job autonomy and behavior of leadership. From the findings of the study, it is also inferred that male and female workers have significantly different level of job satisfaction.
    Keywords: Human resource management practices; job satisfaction; employees; banking sector
    JEL: E24 C12 E44
    Date: 2010–08–18
  4. By: Zwick, Thomas
    Abstract: This paper shows that training of older employees is less effective. Training effectiveness is measured with respect to key dimensions such as career development, earnings, adoption of new skills, flexibility or job security. Older employees also pursue less ambitious goals with their training participation. An important reason for these differences during the life cycle might be that firms do not offer the 'right' training forms and contents. Older employees get higher returns from informal and directly relevant training and from training contents that can be mainly tackled by crystallised abilities. Training incidence in the more effective training forms is however not higher for older employees. Given that other decisive variables on effectiveness such as training duration, financing and initiative are not sensitive to age, the wrong allocation of training contents and training forms therefore is critical for the lower effectiveness of training. --
    Keywords: Training,Older Employees,Linked-Employer-Employee Data
    JEL: J10 J24 J28
    Date: 2011
  5. By: Zur Shapira; Gary Dushnitsky
    Abstract: This paper investigates the effect of compensation of corporate personnel on their investment in new technologies. We focus on a specific corporate activity, namely corporate venture capital (CVC), describing minority equity investment by established-firms in entrepreneurial ventures. The setting offers an opportunity to compare corporate investors to investment experts, the independent venture capitalists (IVCs). On average, we observe a performance gap between corporate investors and their independent counterparts. Interestingly, the performance gap is sensitive to CVCs' compensation scheme: it is the largest when CVC personnel are awarded performance pay. Not only do we study the association between incentives and performance but we also document a direct relationship between incentives and the actions managers undertake. For example, we observe disparity between the number of participants in venture capital syndicates that involve a corporate investor, and those that consist solely of IVCs. The disparity shrinks substantially, however, for a subset of CVCs that compensate their personnel using performance pay. We find a parallel pattern when analyzing the relationship between compensation and another investment practice, staging of investment. To conclude, the paper investigates the three elements of the principal-agent framework, thus providing direct evidence that compensation schemes (incentives) shape investment practices (managerial action), and ultimately investors¡¦ outcome (performance).
    Date: 2011–08
  6. By: Blau, Francine D. (Cornell University); Kahn, Lawrence M. (Cornell University)
    Abstract: We use Michigan Panel Study of Income Dynamics data and data from a 2008 telephone survey of adults conducted by Westat for the Princeton Data Improvement Initiative (PDII) to explore the importance and feasibility of adding retrospective questions about actual work experience to cross-sectional data sets. We demonstrate that having such actual experience data is important for analyzing women's post-school human capital accumulation, residual wage inequality, and the gender pay gap. Further, our PDII survey results show that it is feasible to collect actual experience data in cross-sectional telephone surveys like the March Current Population Survey annual supplement.
    Keywords: gender, microeconomic data collection, human capital, work experience
    JEL: C81 J16 J24
    Date: 2011–07
  7. By: Frosch, Katharina; Göbel, Christian; Zwick, Thomas
    Abstract: Adopting a dynamic perspective, this paper investigates age-related staffing patterns in German establishments and their effect on innovative performance. First, we investigate how establishments achieve the necessary workforce rejuvenation - from the inflow of younger or from outflows of older workers. In addition, we explore whether certain staffing patterns are more likely to appear under different economic regimes. In a second step, we analyse whether an establishment's innovative performance is related to the staffing patterns it experiences. The analysis of linked-employer-employee data shows that most of the 585 German establishments covered rejuvenate by inflows of younger workers. Half of the establishments also use the outflow of older workers. Furthermore, workforces are more likely to become more age-heterogeneous in growing establishments. Finally, we do not find evidence that a youth-centred human resource strategy (always) fosters innovation. --
    Keywords: Workforce aging,staffing strategies,innovation
    JEL: M51 J24 O31
    Date: 2011
  8. By: Uschi Backes-Gellner (Department of Business Administration, University of Zurich); Jens Mohrenweiser (Centre for European Economic Research); Kerstin Pull (Department of Human Resource Management and Organization, Eberhard Karls Universitaet Tuebingen)
    Abstract: The German Codetermination Law grants workers of establishments with 200 or more employees the right to have a works councillor fully exempted from his regular job while still being paid his regular salary. We analyze theoretically and empirically how this de jure right to paid leave of absence translates into practice and explicitly take into account the nature of the industrial relations participation regime. We find the right of exemption to make no difference in cooperative employment relations, but to develop its bite in adversarial rela-tions, i.e. when – without legal enforcement – the legislator’s intent would not be realized.
    Keywords: Works councils, employment relations, de facto and de jure consequences of legal regulations
    JEL: J53 M54 K31
    Date: 2011–07
  9. By: Heinemann, Friedrich; Hennighausen, Tanja; Moessinger, Marc-Daniel
    Abstract: Although demographic change leaves pay-as-you-go pension systems unsustainable, reforms, such as a higher pension age, are highly unpopular. This contribution looks into the role of intrinsic motivation as a driver for pension reform acceptance. Theoretical reasoning suggests that this driver should be relevant: The choice among different pension reform options (increasing pension age, increasing contributions, cutting pensions) can be analyzed within the framework of an optimal job separation decision. In this optimization, intrinsic job satisfaction matters as it decreases the subjective costs of a higher pension age. We test this key hypothesis on the basis of the German General Social Survey (ALLBUS). The results are unambiguous: In addition to factors such as age or education, the inclusion of intrinsic work motivation helps to improve our prediction of an individual's reform orientation. Our results are of importance for reform acceptance beyond the specific topic of pension reform. They point to the fact that the support for welfare state reform is also decided at the workplace. --
    Keywords: Pension system,reforms,pension age,ALLBUS
    JEL: D78 H55 H31
    Date: 2011
  10. By: Chongvilaivan, Aekapol (Institute of Southeast Asian Studies); Powdthavee, Nattavudh (Nanyang Technological University, Singapore)
    Abstract: This paper is an empirical study of slope heterogeneity in job satisfaction. It provides evidence from the generalized ordered probit models that different job characteristics tend to have different distributional impacts on the overall job satisfaction. For instance, standard models tend to significantly underestimate the effects of monthly salary and hours worked at generating the "highly" satisfied workers, whilst lowering the incidence of the "very dissatisfied" workers. Although our results should be viewed as illustrative, we provide discussions of their potential implications for employers and they could help with the design of employment contracts.
    Keywords: generalized ordered probit, employment contract, heterogeneity, job satisfaction, salary, work-life balance
    JEL: J53 D61
    Date: 2011–07
  11. By: Yusuke Kinari; Noriko Mizutani; Fumio Ohtake; Hiroko Okudaira
    Abstract: Recent studies report that productivity increases under tournament reward structures than under piece rate reward structures. We conduct maze-solving experiments under both reward structures and reveal that overconfidence is a significant factor in increasing productivity. Specifically, subjects exhibiting progressively higher degrees of overconfidence solve more mazes. This result shows a positive aspect of overconfidence, which usually has been examined in its negative aspect as an expectation bias.
    Date: 2011–08–01
  12. By: Parsons, Donald O. (George Washington University)
    Abstract: The potentially adverse labor market effects of severance pay mandates are a continuing source of policy concern. In a seminal study, Lazear (1990) found that contract avoidance of severance pay firing costs was theoretically simple – a bonding scheme would do – but that empirically the labor market distortions were large. Subsequent empirical work resolved the apparent paradox – firing cost effects are modest even without firm avoidance activities. To explore why that should be so, formal measures of severance-induced firing costs and hiring costs are derived. Firing costs are, it turns out, systematically less than benefit generosity alone would imply. Moreover their interrelationship with hiring costs, often employed in empirical studies as a substitute measure, is complex, with co-movements varying in sign and magnitude across policy parameters and the economic environment. Although the analysis assumes a fixed benefit mandate, the cost measures are easily extended to assess the impact of service-linked severance benefits on age-specific employment levels. The model permits design of a cohort-neutral severance mandate – which is not a flat rate structure.
    Keywords: severance pay, firing costs, hiring costs, layoff, employment, insurance, savings, moral hazard
    JEL: J65 J41 J33
    Date: 2011–07
  13. By: Timothy Besley; Maitreesh Ghatak
    Abstract: We explore the consequence for taxation and regulation of bonus pay when investors are protected by taxpayers from downside risk. The paper develops a model where workers in financial sector firms make decisions about effort and risktaking which are influenced by the structure of bonus pay. Bailouts lead to too little effort, too much risk-taking and increase inequality. We show that the optimal structure of bonuses can be implemented by a combination of a regulation on the structure of bonuses and a tax on their level.
    Date: 2011–07

This nep-hrm issue is ©2011 by Tommaso Reggiani. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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