nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2012‒01‒18
thirteen papers chosen by
Tommaso Reggiani
Universita' di Bologna

  1. Retaining through Training Even for Older Workers By M. PICCHIO; J. C. VAN OURS
  3. The Change of Job Opportunities: the Role of Computerization and Institutions By V. Nellas; E. Olivieri
  4. The Interplay of Human and Social Capital in Shaping Entrepreneurial Performance: The Case of Vietnam By E. Santarelli; H. T. Tran
  5. Labor Market Return to Computer Skills: Using Microsoft Certification to Measure Computer Skills By Ganna Vakhitova; Christopher R. Bollinger
  6. Productivity shocks and aggregate fluctuations in an estimated endogenous growth model with human capital By Jim Malley; Ulrich Woitek
  7. How does the social distance between an employee and a manager affect employee competition for a reward? By Glenn Dutcher
  8. Knowledge Accumulation within an Organization By Ngo Van Long; Antoine Soubeyran; Raphael Soubeyran
  9. Paying for Performance: Incentive Pay Schemes and Employees' Financial Participation By Alex Bryson; Richard Freeman; Claudio Lucifora; Michele Pellizzari; Virginie Perotin
  10. Going to university? Family background and tertiary education enrolment in France and Italy By Elisabetta Croci Angelini; Francesco Farina
  11. The Implication of Peer and Parental Influences on University Attendance: A Gender Comparison By Louis N. Christofides; Michael Hoy; Joniada Milla; Thanasis Stengos
  12. Understanding the Incentives of Commissions Motivated Agents: Theory and Evidence from the Indian Life Insurance Market By Santosh Anagol; Shawn Cole; Shayak Sarkar
  13. The firm as a common. The case of accumulation and use of common resources in mutual benefit organizations By Ermanno C. Tortia

    Abstract: This paper investigates whether on-the-job training has an effect on the employability of workers. Using data from the Netherlands we disentangle the true effect of training incidence from the spurious one determined by unobserved individual heterogeneity. We also take into account that there might be feedback from shocks in the employment status to future propensity of receiving firm-provided training. We find that firm-provided training significantly increases future employment prospects. This also holds for older workers, suggesting that firm-provided training may be an important instrument to retain older workers at work.
    Keywords: training, employment, human capital, older workers.
    JEL: C33 C35 J21 J24 M53
    Date: 2011–10
  2. By: Benoit Dostie (IEA, HEC Montréal); Pierre Thomas Léger (IEA, HEC Montréal)
    Abstract: We use longitudinal linked employer-employee data and find that the probability of participating in firm-sponsored classroom training diminishes rapidly for workers aged 45 years and older. Although the standard human capital investment model predicts such a decline, we also consider the possibility that returns to training decline with age. Taking into account endogenous training decisions, we find that the training wage premium diminishes only slightly with age. However, estimates of the impact of training on productivity decrease dramatically with age, suggesting that incentives for firms to invest in classroom training are much lower for older workers.
    Date: 2011–11
  3. By: V. Nellas; E. Olivieri
    Abstract: This paper studies the pattern of job opportunities over the last two decades in European countries. We find that the share of high-skilled jobs have been expanding over time, while the share of medium- skilled jobs have been declining. These changes are in line with the US patterns and, according to the previous literature, they come from recent technological changes. However, our data show an interesting difference between the US and Europe: in Europe there is not any increase in the share of low-skilled employment. Moreover, we find that the difference between the proportion of employment hired in low-skilled and medium-skilled jobs is negatively correlated with both the unemployment rate and the degree of employment protection in the labour market. We propose a theoretical model to study the effects of a technological shock on the employment structure in a unionized economy. By accounting for the collective bargaining process, our model may fit Continental Europe better than the previous ones. We conclude that the definition of the union policy is crucial in order to explain observed cross-country heterogeneity in low-skilled employment.
    JEL: J2 J51 O3
    Date: 2012–01
  4. By: E. Santarelli; H. T. Tran
    Abstract: This study investigates the effects of human capital, social capital and their interaction on the performance of 1,398 Vietnamese new-born firms. Operating profit is used as the measure of success. Human capital is captured by individual-level professional education, start-up experience, and learning. Whereas the first two dimensions of human capital are measured with traditional indicators, we define learning as ability to accumulate knowledge to conduct innovation activities (new product introduction, product innovation and process innovation). Social capital is measured as benefits obtained from personal strong-tie and weak-tie networks. Key findings are three-fold: (i) human capital strongly predicts firm success, with learning exerting a statistically significant positive impact on operating profit; (ii) benefits from weak ties outweigh those from strong ties; (iii) interaction of human capital and social capital displays a statistically significant positive effect on new-firm performance.
    JEL: L26 L25 L14 J24 O53
    Date: 2012–01
  5. By: Ganna Vakhitova (Kyiv School of Economics, Kyiv Economic Institute); Christopher R. Bollinger (University of Kentucky)
    Abstract: Using data from a Microsoft survey and the Current Population Survey, we examine the returns to Microsoft Certification in early 2000’s. The formal structure of Microsoft Certification provides a well documented external measure of computer skills rather than the ad-hoc self reports used in other research. We find that the wage premium for MS certification may be over 30% in the full labor market. When certificate holders are compared to only individuals in IT occupations, the overall wage premium falls to a range of 3-7%. We find that the hierarchical structure of Microsoft Certification is reflected in the wage premium associated with specific certificates, further supporting the claim that these certificates measure skills valued in the labor market. We also find that different IT occupations have different values for these skills. The similarity between the return to certification and the return to general education is examined.
    Keywords: Computer skills; human capital; Microsoft certification; IT wage premium
    JEL: J24 J30 J31
    Date: 2011–12
  6. By: Jim Malley; Ulrich Woitek
    Abstract: Employing an endogenous growth model with human capital, this paper explores how productivity shocks in the goods and human capital producing sectors contribute to explaining aggregate fluctuations in output, consumption, investment and hours. Given the importance of accounting for both the dynamics and the trends in the data not captured by the theoretical growth model, we introduce a vector error correction model (VECM) of the measurement errors and estimate the model’s posterior density function using Bayesian methods. To contextualize our findings with those in the literature, we also assess whether the endogenous growth model or the standard real business cycle model better explains the observed variation in these aggregates. In addressing these issues we contribute to both the methods of analysis and the ongoing debate regarding the effects of innovations to productivity on macroeconomic activity.
    Keywords: Endogenous growth, human capital, real business cycles, VEC Mmeasurement errors, Bayesian estimation
    JEL: C11 C52 E32
    Date: 2011–08
  7. By: Glenn Dutcher
    Abstract: This study examines how employees internalize differences in social distance between themselves and their managers when they are competing for a reward given by the manager. In an employer/employee relationship, this difference in social distance between the employer and the various employees leads to a disadvantageous situation for the socially distant workers when raises, promotions, special considerations etc. are given. Since social distance is present in most organizations, understanding how employees work effort changes in response to changes in social distance is of upmost importance. In prior literature, this disadvantage has always been assumed/shown to lead to lower effort than the advantaged worker. The results partially back up this claim and show that females who are socially distant from their manager contribute much less than females who are socially closer or males regardless of the social distance.
    Keywords: Experiment, Social distance
    JEL: C91 C92
    Date: 2011–12
  8. By: Ngo Van Long; Antoine Soubeyran; Raphael Soubeyran
    Abstract: We develop a simple model of task allocation for knowledge workers over their career within an organization. The human capital theory initiated by Becker (1962, 1964) has o¤ered a rich analysis of an individuals life cycle investment in human capital. One of the main result of this literature states that human capital investments are undertaken at the early stage of the career because workers have then a longer period of time over which they can bene…t from the return of their investments. In this paper, we consider a knowledge accumulation problem within an organization that cannot prevent the worker from quitting and using the knowledge outside the organization. In the …rst best situation, we show a similar result as in the human capital theory, i.e. the share of time allocated to knowledge creation tasks decreases over time. We then ask how this pattern is a¤ected when the knowledge worker can leave the organization and bene…t from this knowledge outside the organization. In this case, we obtain the novel result that the time path of the fraction of working time allocated to knowledge creation tasks is non-monotone. This fraction is highest at the early career stage, falls gradually, then rises again, before falling …nally toward zero. We also show that an increase in the …rm-speci…city of knowledge can increase or decrease the life-time income of the knowledge worker.
    Date: 2012–01
  9. By: Alex Bryson; Richard Freeman; Claudio Lucifora; Michele Pellizzari; Virginie Perotin
    Abstract: We present new comparable data on the incidence of performance pay schemes in Europe and the USA. We find that the percentage of employees exposed to incentive pay schemes ranges from around 10-15 percent in some European countries to over 40 percent in Scandinavian countries and the US. Individual pay and profit/gain sharing schemes are widely diffused, whereas share ownership schemes are much less common, particularly in Europe. We document a number of empirical regularities. Incentive pay is less common in countries with a higher share of small firms. Higher product and labour market regulation are associated with lower use of incentive pay. Capital market development is a necessary requirement for a wider diffusion of incentive pay, particularly sharing and ownership schemes. When we control for a large set of individual characteristics and company attributes, we find that the probability that a worker is covered by an incentive scheme is higher in large firms and in high-skilled occupations, while it is much lower for females.
    Keywords: performance pay, financial participation, institutions
    JEL: J24 J33 D31
    Date: 2012–01
  10. By: Elisabetta Croci Angelini; Francesco Farina
    Abstract: Differently from the presumption of standard economic theory, empirical evidence suggests that returns to education do not play the most relevant role in tertiary education enrolment. On the whole, the results of our investigation conducted on a probit regression model indicates that the cultural family background has a great influence on the young’s decision to go to university. The offspring’s own income is also very significant in all models, as the p-values are very good in both countries. The main difference between the two countries is that the influence of the father is much lower in France than in Italy, where the coefficient for the father’s education is relevant on average to the same extent than the mother’s education one.
    Keywords: human capital formation, intergenerational mobility, income and educational inequality.
    JEL: I21 J24 D63
    Date: 2011–01
  11. By: Louis N. Christofides (Universities of Cyprus and Guelph.); Michael Hoy (University of Guelph.); Joniada Milla (University of Guelph.); Thanasis Stengos (University of Guelph.)
    Abstract: In this study, we explore the effect of peers and family on University attendance and graduation. We find that parental expectations and peer effects have a significant impact on the educational outcomes which operates through the interconnectedness between grades and aspirations during high school. Apart from this indirect path, parents and peers directly influence educational outcomes. Policy measures that exploit especially the parental influence on the child may be useful to balance the gender gap of University graduates in Canada.
    Keywords: University Attendance and Graduation, Peer and Parental Influences.
    JEL: I20 J00
    Date: 2012
  12. By: Santosh Anagol (Wharton School of Business, University of Pennsylvania); Shawn Cole (Harvard Business School, Finance Unit); Shayak Sarkar (Harvard University)
    Abstract: We conduct a series of field experiments to evaluate two competing views of the role of financial service intermediaries in providing product recommendations to potentially uninformed consumers. One view argues intermediaries provide valuable product education, and guide consumers towards suitable products. Consumers understand how commissions affect agents' incentives, and make optimal product choices. The second view argues that intermediaries recommend and sell products that maximize the agents' well-being, with little or no regard for the customer. Audit studies in the Indian life insurance market find evidence supporting the second view: in 60-80% of visits, agents recommend unsuitable (strictly dominated) products that provide high commissions to the agents. Customers who specifically express interest in a suitable product are more likely to receive an appropriate recommendation, though most still receive bad advice. Agents cater to the beliefs of uninformed consumers, even when those beliefs are wrong. We then test how regulation and market structure affect advice. A natural experiment that required agents to describe commissions for a specific product caused agents to shift recommendations to an alternative product, which had even higher commissions but no disclosure requirement. We do find some scope for market discipline to generate debiasing: when auditors express inconsistent beliefs about the product suitable from them, and mention they have received advice from another seller of insurance, they are more likely to receive suitable advice. Agents provide better advice to more sophisticated consumers. Finally, we describe a model in which dominated products survive in equilibrium, even with competition.
    Date: 2012–01
  13. By: Ermanno C. Tortia
    Abstract: Common resources are quasi-public resources, which are rivaled but non excludable in consumption or in appropriation. While the exploitation of common resources has been widely studied in the literature originated by Elinor Ostron’s works (starting from 1990), the study of common resources inside entrepreneurial organization in not sufficiently developed to date. This paper establishes three dimensions that highlight the relevance of the communality of resources in entrepreneurial organizations: the accumulation and use of common capital resources owned by the organization; the distribution of a rivaled, but non excludable value added among the controlling patrons; and the management of common non-owned resources (for example natural resources) by the organization. The first theme is selected and developed further. Cooperative firms are introduced are instance of ownership form that appears, historically and institutionally, to be particularly keen to accumulate, use, distribute common resources.
    Keywords: common resources; rivalry; non-excludability; entrepreneurial organizations; accumulation; cooperative firms
    Date: 2011

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