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on Human Capital and Human Resource Management |
| By: | Fouarge Didier; Grip Andries de; Smits Wendy; Vries Robert de (METEOR) |
| Abstract: | As suggested by human capital theory, workers with flexible contracts participate less often intraining than those with permanent contracts. We find that this is merely due to the fact thatflexworkers receive less employer–funded training, a gap they can only partly compensate for bytheir own training investments. Flexworkers particularly participate less in firm–specifictraining that is meant to keep up with new skill demands than workers with permanent contracts.However, for those who participate in employer–funded firm–specific training, a temporary contractappears to facilitate the transition to a permanent contract with the same employer. However, thisdoes not hold for participation in self–paid training. This training, which is usually generaltraining, does not help in finding a better job. |
| Keywords: | labour economics ; |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2011051&r=hrm |
| By: | Julia Reilich |
| Abstract: | Looking at smoking-behavior it can be shown that there are differences concerning the time-preference-rate. Therefore this has an effect on the optimal schooling decision in the way that we assume a lower average human capital level for smokers. According to a higher time-preference-rate we suppose a higher return to education for smokers who go further on education. With our empirical fondings we can confirm the presumptions. We use interactions-terms to regress the average rate of return with the instrumentvariable approach. Therefore we obtain that smokers have a significantly higher average return to education than non-smokers. |
| Keywords: | Returns to education, Human Capital, Smoking Effects |
| JEL: | J24 J31 I21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp420&r=hrm |
| By: | Kato, Masatoshi; Okamuro, Hiroyuki; Honjo, Yuji |
| Abstract: | Using a sample from an original questionnaire survey in Japan, this paper explores whether and how founders’ human capital affects innovation outcomes by start-ups. The results provide evidence that founders with greater human capital are more likely to yield innovation outcome. However, because certain types of founders’ human capital may boost R&D investment, which possibly results in innovation outcomes, we estimate the determinants of innovation outcomes by an instrumental variable probit model taking into account the endogeneity of R&D investment. Our findings suggest that specific human capital for innovation, such as founders’ prior innovation experience, is directly associated with innovation outcomes after start-up, while generic human capital, such as founders’ educational background, indirectly affects innovation outcomes through R&D investment. |
| Keywords: | Start-up, Founder, Human capital, Innovations, R&D investment |
| JEL: | L24 M13 O31 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2011-11&r=hrm |
| By: | Stark, Oded; Zakharenko, Roman |
| Abstract: | This paper develops a one sector, two-input model with endogenous human capital formation. The two inputs are two types of skilled labor: engineering, which exerts a positive externality on total factor productivity, and law, which does not. The paper shows that a marginal prospect of migration by engineers increases human capital accumulation of both types of workers (engineers and lawyers), and also the number of engineers who remain in the country. These two effects are socially desirable, since they move the economy from the(inefficient) free-market equilibrium towards the social optimum. The paper also shows that if the externality effect of engineering is sufficiently powerful, everyone will be better off as a consequence of the said prospect of migration, including the engineers who lose the migration lottery, and even the individuals who practice law. -- |
| Keywords: | heterogeneous human capital,differential externality effects,migration of educated workers,human capital formation,efficient acquisition of human capital,beneficial brain drain |
| JEL: | F22 J61 R23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:22&r=hrm |
| By: | Stark, Oded; Zakharenko, Roman |
| Abstract: | This paper develops a one sector, two-input model with endogenous human capital formation. The two inputs are two types of skilled labor: âengineering,â which exerts a positive externality on total factor productivity, and âlaw,â which does not. The paper shows that a marginal prospect of migration by engineers increases human capital accumulation of both types of workers (engineers and lawyers), and also the number of engineers who remain in the country. These two effects are socially desirable, since they move the economy from the (inefficient) free-market equilibrium towards the social optimum. The paper also shows that if the externality effect of engineering is sufficiently powerful, everyone will be better off as a consequence of the said prospect of migration, including the engineers who lose the migration âlottery,â and even the individuals who practice law. |
| Keywords: | Heterogeneous human capital, Differential externality effects, Migration of educated workers, Human capital formation, Efficient acquisition of human capital, Beneficial brain drain, Labor and Human Capital, F22, J61, R23, |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:119111&r=hrm |
| By: | Constant, Amelie F. (DIW DC, George Washington University); Otterbach, Steffen (University of Hohenheim) |
| Abstract: | If individuals reveal their preference as consumers, then they are taken seriously. What happens if individuals, as employees, reveal their preferences in working hours? And what happens if there is a misalignment between actual hours worked and preferred hours, the so-called work hours constraints? How does this affect the productivity of workers, their health, and overall life satisfaction? Labor supply and corresponding demand are fundamental to production. Labor economists know for long that the fit of a worker in a job and the matching of skills to the assigned employment are of paramount importance; they guarantee high productivity, quality output, and individual happiness. Employees demand higher social awareness and a working environment where they feel useful and happy. The evidence shows that discrepancies between preferred hours of work and actual hours of work can have serious detrimental effects on workers, perverse effects on labor supply with unintended direct ramifications on the labor market and indirect implications on the goods and services markets. The sooner employers acknowledge and address working hours constraints the faster we can build work lives that make us better off. |
| Keywords: | labor market, work time, work hours constraints, health, happiness, satisfaction |
| JEL: | I10 J21 J22 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp35&r=hrm |
| By: | Bowlus, Audra J.; Robinson, Chris |
| Abstract: | Separate identification of the price and quantity of human capital has important implications for understanding key issues in economics. Price and quantity series are derived for four education levels. The price series are highly correlated and they exhibit a strong secular trend. Three resulting implications are explored: the rising college premium is found to be driven more by relative quantity than relative price changes, life-cycle wage profiles are readily interpretable as reflecting optimal human capital investment paths using the estimated price series, and adjusting the labor input for quality increases dramatically reduces the contribution of MFP to growth. |
| Keywords: | Human Capital, Productivity and Growth |
| JEL: | J24 J31 O47 |
| Date: | 2011–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2011-32&r=hrm |
| By: | Jan Zabojnik (Queen's University) |
| Abstract: | This paper models two key roles of subjective performance evaluations: their incentive role and their feedback role. The paper shows that the feedback role makes subjective pay feasible even without repeated interaction, as long as there exists some verifiable measure of performance. It also shows that while subjective pay is helpful, it cannot achieve full efficiency. However, fully efficient incentives are achievable if the firm can commit to a forced distribution of evaluations and employs a continuum of workers. With a small number of workers, a forced distribution is valuable only if the verifiable measure is poor. |
| Keywords: | Subjective Evaluations, Performance Feedback, Optimal Contracts |
| JEL: | D82 D86 M52 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1283&r=hrm |
| By: | Inés Macho-Stadler (Department of Economics, Universitat Autònoma de Barcelona); David Pérez-Castrillo (Department of Economics, Universitat Autònoma de Barcelona); Nicolás Porteiro (Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | We consider a market where firms hire workers to run their projects and such projects differ in profitability. At any period, each firm needs two workers to successfully run its project: a junior agent, with no specific skills, and a senior worker, whose effort is not verifiable. Senior workers differ in ability and their competence is revealed after they have worked as juniors in the market. We study the length of the contractual relationships between firms and workers in an environment where the matching between firms and workers is the result of market interaction. We show that, despite in a one-firm-one-worker set-up long-term contracts are the optimal choice for firms, market forces often induce firms to use short-term contracts. Unless the market only consists of firms with very profitable projects, firms operating highly profitable projects offer short-term contracts to ensure the service of high-ability workers and those with less lucrative projects also use short-term contracts to save on the junior workers' wage. Intermediate firms may (or may not) hire workers through long-term contracts. |
| Keywords: | Labor contracts, short-term, long-term, matching, incentives. |
| JEL: | D86 C78 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:11.08&r=hrm |
| By: | Thomas Sampson |
| Abstract: | Understanding the allocation of skilled labor across industries is necessary to explain inter-industry wage differences and the effect of trade on wages. This paper develops a multi-sector assignment model with both heterogeneous labor and a non-labor input in which high skill agents match with high input productivity sectors where they can best leverage their talent. When the ranking of sectors by input productivity differs across countries, their ranking by workforce skill also differs - this is an assignment reversal. In a two sector, two country model the existence of an assignment reversal implies that each country has a comparative advantage in its high skill sector. Consequently, trade integration causes both the relative wage of high skill workers, and wage inequality within the high skill sector, to increase in both countries. Using exogenous differences in capital productivity induced by a country's proximity to major capital exporters the paper shows that international variation in the industry wage structure supports the existence of assignment reversals and is consistent with the model's sorting predictions. |
| Keywords: | skilled labor, productivity, workforce, wage inequality, skill intensity reversal |
| JEL: | J30 L60 O30 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1105&r=hrm |
| By: | Hubert Lackner; Wolfgang H. Güttel; Christian Garaus; Stefan Konlechner; Barbara Müller |
| Abstract: | During the past decade ambidexterity has emerged as the central research stream in organization science to investigate how organizations manage to remain successful over time. By using the lens of organizational learning, ambidexterity can be defined as the simultaneous pursuit of exploration and exploitation. However, the link between ambidexterity and the human resource management of a firm is still a blind spot on the ambidexterity research map. To shed light on this issue, we show how different ambidextrous learning architectures can be created and maintained by the means of consistent HRM systems. By doing so, we show how HRM systems as specific bundles of HRM practices facilitate ambidextrous learning. Thereby we emphasize the challenge of creating and sustaining the horizontal and vertical fit of an HRM system with regard to different ambidextrous designs. |
| Keywords: | Ambidexterity; Exploration; Exploitation; Organizational Learning; HRM; Strategic Human Resource Management |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:11-10&r=hrm |
| By: | Grip Andries de; Sauermann Jan; Sieben Inge (METEOR) |
| Abstract: | In this paper, we estimate tenure-performance proles using unique panel data that containdetailed information on individual workers'' performance. We find that a 10 per cent increase intenure leads to an increase in performance of 5.5 per cent of a standard deviation. Thistranslates to an average performance increase of about 75 per cent within the first year of theemployment relationship. Furthermore, we show that there are peer effects in learning on-the-job:Workers placed in teams with more experienced and thus more productive peers performsignificantly better than those placed in teams with less experienced peers. An increase in theaverage team tenure by one standard deviation leads to an increase of 11 to 14 per cent of astandard deviation in performance. |
| Keywords: | labour economics ; |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2011052&r=hrm |
| By: | Liu, Taoxiong; Zhou, Bihua |
| Abstract: | We propose an extended principal-agent model considering employee commitment and describe how to motivate committed agent, who not only shows regard for his own income but also cares the organizational benefit. The principal also would like to provide support to such an agent and his utility depends on both the final profit and the payoff to the agent. There are some interesting insights into the characteristic of optimal contracts: First, commitment is an effective motivator and committed employee needs less monetary inducement to perform his job well than one who not. More specifically, undifferentiated pay is sufficient in incentivizing committed agent to implement high effort in some cases. Second, commitment and wage differential are substitutable to each other in the optimal incentive compensation design. Third, commitment is not always good for organizational efficiency when the increase in employee commitment relies on the principal’s support. Our model's finding is consistent with employee incentive in some organizations, and also help to incentive mechanism design under wages differential constraints and understanding excessive compensation. |
| Keywords: | Commitment; Organizational support; Optimal Incentive; Contract |
| JEL: | D23 J33 |
| Date: | 2011–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35550&r=hrm |
| By: | Luis Santos-Pinto |
| Abstract: | I extend Spence's (1973) signaling model by assuming some workers are overconfident - they underestimate their marginal cost of acquiring education - and some are underconfident. Firms cannot observe workers' productive abilities and beliefs but know the fractions of high-ability, overconfident, and underconfident workers. I find that biased beliefs lower the wage spread and compress the wages of unbiased workers. I show that gender differences in self-confidence can contribute to the gender pay gap. If education raises productivity, men are overconfident, and women underconfident, then women will, on average, earn less than men. Finally, I show that biased beliefs can improve welfare. |
| Keywords: | signaling; education; self-confidence; wage compression; gender pay gap |
| JEL: | D03 D82 J24 J31 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:11.07&r=hrm |
| By: | Cabrales, Antonio; Charness, Gary |
| Abstract: | We devise an experiment to explore optimal contracts in a hidden-information context. A principal offers one of three possible contract menus to a team of two agents of unknown skill levels, with both agents’ participation needed for production. We observe numerous rejections of the more lopsided menus, and principals respond by offering more favorable menus. Apart from rejections,wesee almost complete separation in agent choices according to the agent types. Behavior converges towards a consensus in which one of the more equitable menus is proposed and agents accept a contract. The consensus menu differs across two treatments in which we vary the payoffs resulting from a rejection. We find strong evidence of social learning by low-skill agents (but only for low-skilled agents), in that a low-skill agent is more likely to reject a contract menu if her teammate rejected a contract menu in the previous period. In addition, low-skilled agents have a particularly adverse reaction to reduced wage offers. |
| Keywords: | Experiment; Hidden information; Optimal contract; Production team; Wage rigidity; |
| JEL: | A13 B49 C91 C92 D21 J41 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/12809&r=hrm |
| By: | Schneck, Stefan |
| Abstract: | This paper uses unique German data to examine the effects of the relative standing on the individual propensity to become self-employed in the next two years. The results suggest that the relationship between relative wage positions and propensity to become self-employed is U-shaped. This is interpreted as evidence that low status translates into entrepreneurial motivation for workers in low relative wage positions. Employees with high relative standing, in turn, seem to be more concerned about the lack of future career prospects in paid employment and consider self-employment as a next step on the individual career ladder. |
| Keywords: | Relative wage position, status, self-employment |
| JEL: | L26 L29 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-486&r=hrm |
| By: | Hsieh, Chihmao (University of Amsterdam); Parker, Simon C. (University of Western Ontario); van Praag, Mirjam (University of Amsterdam) |
| Abstract: | This paper proposes that risk aversion encourages individuals to invest in balanced skill profiles, making them more likely to become entrepreneurs. By not having taken this possible linkage into account, previous research has underestimated the impacts both of risk aversion and balanced skills on the likelihood individuals choose entrepreneurship. Data on Dutch university graduates provides evidence which supports this contention. It thereby raises the possibility that even risk-averse people might be suited to entrepreneurship; and it may also help explain why prior research has generated mixed evidence about the effects of risk aversion on selection into entrepreneurship. |
| Keywords: | entrepreneurship, jack-of-all-trades, risk, human capital, occupational choice |
| JEL: | D81 J24 L26 M13 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6200&r=hrm |
| By: | Chihmao Hsieh (University of Amsterdam); Simon C. Parker (University of Western Ontario); C. Mirjam van Praag (University of Amsterdam) |
| Abstract: | This paper proposes that risk aversion encourages individuals to invest in balanced skill profiles, making them more likely to become entrepreneurs. By not having taken this possible linkage into account, previous research has underestimated the impacts both of risk aversion and balanced skills on the likelihood individuals choose entrepreneurship. Data on Dutch university graduates provides evidence which supports this contention. It thereby raises the possibility that even risk-averse people might be suited to entrepreneurship; and it may also help explain why prior research has generated mixed evidence about the effects of risk aversion on selection into entrepreneurship. |
| Keywords: | entrepreneurship; jack-of-all-trades; risk; human capital; occupational choice |
| JEL: | D81 J24 L26 M13 |
| Date: | 2011–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110178&r=hrm |
| By: | James Ted McDonald (University of New Brunswick); Casey Warman (Queen's University); Christopher Worswick (Carleton University) |
| Abstract: | We analyze the process of immigrant selection and occupational outcomes of International Medical Graduates (IMGs) in the US and Canada. We extend the IMG relicensing model of Kugler and Sauer (2005) to incorporate two different approaches to immigrant selection: employer nomination systems and point systems. Analysis of the model indicates that point systems can allow IMGs to immigrate who would be unable to gain entry to the receiving country under an employer nomination system and who are subsequently unable to relicense and work as physicians in the receiving country. We apply the model to the case of IMGs migrating to the US and Canada since the 1960s and evaluate the empirical predictions from the model based on an analysis of the occupational outcomes of IMGs in Canada (where a point system has been in place) and in the US (where IMGs enter through employer nomination). In Canada, IMGs are less likely to be employed as a physician than are IMGs in the US and a large percentage of the IMGs in Canada either find work in lower skill occupations or are not employed. The empirical findings are consistent with our hypotheses based on the theoretical framework on the effects of immigrant selection systems on the probability of working as a physician in the two countries. |
| Keywords: | physicians, immigration, occupation, skills, human capital |
| JEL: | J24 J31 J61 J62 J71 J80 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1285&r=hrm |
| By: | Lindahl, Mikael (Uppsala Center for Labor Studies); Palme, Mårten (Department of Economics, Stockholm University, SE-106 91 Stockholm, Sweden); Sandgren Massih, Sofia (Uppsala Center for Labor Studies); Sjögren, Anna (IFAU, Box 513, SE-751 20 Uppsala, Sweden) |
| Abstract: | Most previous studies on intergenerational transmission of human capital are restricted to two generations - between the parent and the child generation. In this paper we investigate if there is an independent effect of the grandparent and the great grandparent generations in this process. We use a dataset where we are able to link individual measures of life time earnings for three generation and data on educational attainments of four generations. We first do conventional regressions and transition matrices for life time earnings measures and educational attainments adding variables for the grandparent and great grandparent generations, respectively. We find that grandparents and even great grandparents significantly influence earnings and education. We then estimate the so called Becker-Tomes model using the educational attainment of the great grandparent generation as an instrumental variable. We fail to find support for the models predictions. |
| Keywords: | Intergenerational income mobility; earnings distribution; income inequality; |
| JEL: | D31 J62 |
| Date: | 2011–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uulswp:2011_021&r=hrm |
| By: | Anna Zaharieva (Institute of Mathematical Economics, Bielefeld University) |
| Abstract: | This paper incorporates job search through personal contacts into an equilibrium matching model with a segregated labour market. Job search in the public submarket is competitive which is in contrast with the bargaining nature of wages in the informal job market. Moreover, the social capital of unemployed workers is endogenous depending on the employment status of their contacts. This paper shows that the traditional Hosios (1990) condition continues to hold in an economy with family contacts but it fails to provide efficiency in an economy with weak ties. This inefficiency is explained by a network externality: weak ties yield higher wages in the informal submarket than family contacts. Furthermore, the spillovers between the two submarkets imply that wage premiums associated with personal contacts lead to higher wages paid to unemployed workers with low social capital but the probability to find a job for those workers is below the optimal level. |
| Keywords: | Personal contacts, family job search, social capital, wages, equilibrium efficiency |
| JEL: | J23 J31 J64 D10 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:459&r=hrm |
| By: | Petra Nieken (University of Bonn); Abdolkarim Sadrieh (University of Magdeburg); Nannan Zhou (University of Cologne) |
| Abstract: | Overconfidence is a well-established behavioral phenomenon that involves an overestimation of own capabilities. We introduce a model, in which managers and agents exert effort in a joint production, after the manager decides on the allocation of the task. A rational manager tends to delegate the critical task to the agent more often than given by the efficient task allocation. In contrast, an overconfident manager is more likely to hoard responsibility, i.e. to delegate the critical task less often than a rational manager. In fact, a manager with a sufficiently high ability and a moderate degree of overconfidence increases the total welfare by hoarding responsibility and exerting more effort than a rational manager. Finally, we derive the conditions under which responsibility hoarding can persist in an organization, showing that the bias survives as long as the overconfidence manager can rationalize the observed output by underestimating the ability of the agent. |
| Keywords: | organizational behavior, management performance, bounded rationality, behavioral bias |
| JEL: | C72 D03 D82 M12 M54 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:368&r=hrm |
| By: | Dunia López-Pintado (Department of Economics, Universidad Pablo de Olavide; CORE, Université catholique de Louvain); Juan D. Moreno-Ternero (Department of Economics, Universidad Pablo de Olavide; CORE, Université catholique de Louvain) |
| Abstract: | We study optimal wage schemes for teams, under the presence of budget constraints, in a model in which agents’ effort decisions are mapped into the probability of the team’s success. We show that (first-best) efficiency can only be attained with complex contracts that are vulnerable to ex post manipulations and off-equilibrium path violations of the budget constraints. Within the domain of simple (and budget-balanced) contracts, an interesting scheme, which treats equal members of the team unequally, emerges as optimal |
| Keywords: | Team production, budget constraints, efficiency, manipulability, impartiality |
| JEL: | C70 D23 D78 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:11.11&r=hrm |
| By: | Laura Guillén (ESMT European School of Management and Technology); Natalia Karelaia (INSEAD) |
| Abstract: | Control-related behaviors are an important attribute in leadership jobs, but do leaders appreciate being surrounded by followers with controlling personalities? Building on the self-enhancement and self-efficacy theories, we propose that leaders with high self-assessed control give better performance evaluations to subordinates who are also high in control. In contrast, leaders with low self-assessed control are quite reserved about the performance of subordinates high in control. We also propose that overall, leaders high in control evaluate more positively their followers’ performance than leaders low in control. We suggest that this difference is magnified if the leader-follower dyad is inconsistent with social norms related to age and hierarchical level. The results obtained by using polynomial regression and response surface techniques to analyze a sample of 138 leader-follower dyads supported our hypotheses showing a bias rooted in leaders’ self-assessed control. We conclude by deriving the theoretical and practical implications of these findings. |
| Keywords: | control similarity, leader-follower dyads, job performance evaluation, self-enhancement, 360-degree instruments |
| Date: | 2011–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:esm:wpaper:esmt-11-12&r=hrm |