nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2012‒02‒20
24 papers chosen by
Tommaso Reggiani
Universita' di Bologna

  1. Occupational Mobility and the Returns to Training By Gueorgui Kambourov; Iourii Manovskii; Miana Plesca
  2. The Contributions of Search and Human Capital to Earnings Growth Over the Life Cycle By Audra J. Bowlus; Alexander Huju Liu
  3. Technical Human Capital and Job Mobility in an Era of Rapid Technological Innovation By Darrell J. Glaser; Ahmed S. Rahman
  4. Are the self-employed really jacks-of-all-trades? Testing the assumptions and implications of Lazear's theory of entrepreneurship with German data By Lechmann, Daniel S. J.; Schnabel, Claus
  5. Wage effects from changes in local human capital in Britain By Kaplanis, Ioannis
  6. Who Benefits from Benefits? Empirical Research on Tangible Incentives By Hammermann, Andrea; Mohnen, Alwine
  7. Human Capital and Technological Transition – Insights from the U.S.Navy By Ahmed S. Rahman
  8. Growth vs. level effect of population change on economic development: An inspection into human-capital-related mechanisms By Raouf BOUCEKKINE; B. MARTINEZ; J. R. RUIZ-TAMARIT
  9. What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology By Daron Acemoglu; David Autor
  10. Inequality, Human Capital Formation and the Process of Development By Galor, Oded
  11. Design and Implementation of Pay for Performance By Gibbs, Michael
  12. Women Count: Gender (in-)equalities in the human capital development in Asia, 1900-60 By Friesen, Julia; Baten, Jörg; Prayon, Valeria
  13. Unequal Access to Higher Education in the Czech Republic: The Role of Spatial Distribution of Universities By Franta, Michal; Guzi, Martin
  14. Bumpy Rides: School to Work Transitions in South Africa By Pugatch, Todd
  15. Standards and Incentives under Moral Hazard with Limited Liability By Reinshagen, Felix
  16. Social Participation and Hours Worked By BARTOLINI Stefano; BILANCINI Ennio
  17. Uncertainty, Task Environment, and Organization Design: An Empirical Investigation By Avner Ben-Ner; Fanmin Kong; Stéphanie Lluis
  18. Workers cooperation within the firm: an analysis using small and medium size firms By Flores-Fillol, Ricardo; Iranzo, Susana; Mañé Vernet, Ferran
  19. Whom to Choose as a Team Mate? A Lab Experiment about In-Group Favouritism By Hammermann, Andrea; Mohnen, Alwine; Nieken, Petra
  20. Testing Canonical Tournament Theory: On the Impact of Risk, Social Preferences and Utility Structure By Sheremeta, Roman M.; Wu, Steven Y.
  21. Beyond the selfishness paradigm and "Organizational Citizenship": Work-related prosocial orientation and organizational democracy By Moldaschl, Manfred; Weber, Wolfgang
  22. Sabotage in Tournaments: Evidence from a Natural Experiment By Balafoutas, Loukas; Lindner, Florian; Sutter, Matthias
  23. Laws and Norms By Benabou, Roland; Tirole, Jean
  24. To volunteer or not to volunteer? A cross-country study of volunteering By Boguslawa Sardinha; Cesaltina Pacheco Pires

  1. By: Gueorgui Kambourov; Iourii Manovskii; Miana Plesca
    Abstract: The literature on the returns to training has pointed out that, immediately following a training episode, wages of participants in employer-sponsored training increase substantially while wages of participants in government-sponsored training hardly change. We argue that a clear selection issue has been overlooked by the literature - most of the government-sponsored trainees are occupation switchers while most participants in employer-sponsored training are occupation stayers. An occupational switch involves a substantial destruction of human capital, and once we account for the associated decline in wages we find a large positive impact of both employer- and government-sponsored training on workers' human capital.
    Keywords: Training, Human Capital, Occupational Mobility
    JEL: E24 H59 J24 J31 J62 J68 M53
    Date: 2012–02–08
  2. By: Audra J. Bowlus (University of Western Ontario); Alexander Huju Liu (University of Western Ontario)
    Abstract: This paper presents and estimates a unified model where both human capital investment and job search are endogenized. This unification enables us to quantify the relative contributions of each mechanism to life cycle earnings growth, while investigating potential interactions between human capital investment and job search. Within the unified framework, the expectation of rising rental rates of human capital through job search gives workers more incentive to invest in human capital. In addition, unemployed workers reduce their reservation rental rates and increase their search effort to leave unemployment quickly to take advantage of human capital accumulation on the job. The results show both forces are important for earnings growth and the interactions are substantial: human capital accumulation accounts for 31% of total earnings growth, job search accounts for 46%, and the remaining 23% is due to the interactions of the two.
    Keywords: Human Capital; Job Search; Life Cycle, Earnings Growth
    JEL: J24 J64 D91
    Date: 2012
  3. By: Darrell J. Glaser (United States Naval Academy); Ahmed S. Rahman (United States Naval Academy)
    Abstract: We analyze the job matching process for skilled labor using an extensive panel dataset of naval officer careers during the Second Industrial Revolution. We find strong separation effects for officers with accumulated skills in technology-focused work and/or those with formal training as engineers. In particular, technology-based human capital increases the probability of a job switch quite substantially, even after controlling for wage differences and seniority. In addition to providing tests of matching-models, our results have important implications for policy makers evaluating incentives for retaining technologically trained human capital. This is applicable to help understand effects of wage differences in labor markets experiencing rapid technological change. Estimates also indicate that a ceteris paribus increase in the distribution of external wage offers increases the probability of job separation. Controlling for seniority and the effects from accumulated human capital, a 1% increase in the wage gap of internal wage offers relative to wages in external labor markets decreases the hazard for job separations by 0.8%.
    Date: 2012–01
  4. By: Lechmann, Daniel S. J.; Schnabel, Claus
    Abstract: Using a large representative German data set and various concepts of self-employment, this paper tests the 'jack-of-all-trades' view of entrepreneurship by Lazear (AER 2004). Consistent with its theoretical assumptions we find that self-employed individuals perform more tasks and that their work requires more skills than that of paid employees. In contrast to Lazear's assumptions, however, self-employed individuals do not just need more basic but also more expert skills than employees. Our results also provide only very limited support for the idea that human capital investment patterns differ between those who become self-employed and those ending up in paid employment. -- Unter Verwendung eines großen, repräsentativen Datensatzes für Deutschland und verschiedener Abgrenzungen der Selbständigkeit überprüft diese Arbeit die 'jack-of-all-trades'-Sicht des Unternehmertums von Lazear (AER 2004). In Übereinstimmung mit ihren theoretischen Annahmen finden wir, dass Selbständige mehr verschiedene Tätigkeiten ausüben und Kenntnisse aus mehr verschiedenen Gebieten benötigen als nicht-selbständige Arbeitnehmer. Im Gegensatz zu Lazear's Annahmen benötigen Selbständige allerdings nicht nur mehr Grundkenntnisse sondern auch mehr Fachkenntnisse als Nicht-Selbständige. Unsere Ergebnisse liefern zudem nur wenig Unterstützung für die Behauptung, dass sich die Muster der Humankapitalaneignung zwischen Selbstständigen und abhängig beschäftigten Arbeitnehmern sichtbar unterscheiden.
    Keywords: entrepreneurship,self-employed,Germany
    JEL: J23 J24
    Date: 2011
  5. By: Kaplanis, Ioannis
    Abstract: This paper examines the impact of local human capital on individuals’ wages through external effects. Employing wage regressions, it is found that changes in individuals’ wages are positively associated with changes in the shares of high-paid occupation workers in the British travel-to-work-areas for the late 1990s. I examine this positive association for different occupational groups (defined by pay) in order to disentangle between production function and consumer demand driven theoretical explanations. The wage effect is found to be stronger and significant for the bottom-paid occupational quintile compared to the middle-paid ones, and using also sectoral controls the paper argues to provide evidence for the existence of consumer demand effects.
    Keywords: Mercat de treball, Salaris, Recursos humans, 331 - Treball. Relacions laborals. Ocupació. Organització del treball,
    Date: 2011–09–10
  6. By: Hammermann, Andrea (RWTH Aachen University); Mohnen, Alwine (Munich University of Technology)
    Abstract: Although a broad field of literature on incentive theory exists, employer-provided tangible goods (hereafter called benefits) have so far been neglected by economic research. A remarkable exception is an empirical study by Oyer (2008). In our study, we test some of his findings by drawing on a German data set. We use two waves of the GSOEP data (2006, 2008) to analyze the occurrence of benefits and their effects on employees' satisfaction. Our results provide evidence for economic as well as psychological explanations. Looking at differences in firms' and employees' characteristics we find that cost efficiency concerns, the purpose to signal good working conditions and the aim to ease employees' effort costs are evident reasons to provide benefits. Furthermore, analyzing the impact of tangible and monetary incentives on satisfaction and employees' feeling of being acknowledged by employers, we find different motivational effects. Our results support the psychological explanation that benefits are evaluated separately from other monetary wage components and are more likely to express employers' concern for their employees and recognition of their performance.
    Keywords: nonmonetary incentives, benefits, work motivation
    JEL: C83 J32 M52
    Date: 2012–01
  7. By: Ahmed S. Rahman (United States Naval Academy)
    Abstract: This paper explores the eects of human capital on workers during the latter 19th century by examining the specic case of the U.S. Navy. During this time, naval ocers belonged either to a regular or an engineer corps and had tasks assigned for their specialized training and experience. To test the eects of specialized skills on career performance, we compile educational data from original-source Naval Academy records for the graduating classes of 1858 to 1905. We merge these with career data extracted from ocial Navy registers for the years 1859 to 1907. This compilation comprises one of the longest and earliest longitudinal records of labor market earnings, education and experience of which we are aware. Our results suggest that wage premia for \engineer-skilled" ocers rapidly deteriorated over their careers; more traditionally skilled ocers were better compensated and promoted more frequently as their careers progressed. This compelled those with engineering skills to leave the service early, contributing to the Navy's failure to keep up with the technological frontier of the time.
    Date: 2012–01
  8. By: Raouf BOUCEKKINE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), Center for Operations Research and Econometrics (CORE) and GREQAM,Aix-Marseille University, France); B. MARTINEZ (Department of Economics, Universidad Complutense de Madrid (Spain)); J. R. RUIZ-TAMARIT (Department of Economic Analysis, Universitat de Valencia (Spain), and Department of Economics, Université Catholique de Louvain (Belgium) (IRES))
    Abstract: This paper studies the different mechanisms and the dynamics through which demography is channelled to the economy. We analyze the role of demographic changes in the economic development process by studying the transitional and the long-run impact of both the rate of population growth and the initial population size on the levels of per capita human capital and income. We do that in an enlarged Lucas-Uzawa model with intergenerational altruism. In contrast to the existing theoretical literature, the long-run level effects of demographic changes, i.e. their impact on the levels of the variables along the balanced growth path, are deeply characterized in addition to the more standard long-run growth effects. We prove that the level effect of the population rate of growth is non-negative (positive in the empirically most relevant case) for the average level of human capital, but a priori ambiguous for the level of per capita income due to the interaction of three transmission mechanisms of demographic shocks, a standard one (dilution) and two non-standard (altruism and human capital accumulation). Overall, the sign of the level effects of population growth depend on preference and technology parameters, but numerically we show that the joint negative effect of dilution and altruism is always stronger than the finduced positive human capital effect. The growth effect of population growth depends basically on the attitude to intergenerational altruism and intertemporal substitution. Moreover, we also prove that the long-run level effects of population size on per capita human capital and income may be negative, nil, or positive, depending on the relationship between preferences and technology, while its growth effect is zero. Finally, we show that the model is able to replicate complicated time relationships between economic and demographic changes. In particular, it entails a negative effect of population growth on per capita income, which dominates in the initial periods, and a positive effect which restores a positive correlation between population growth and economic performance in the long term.
    Keywords: Human Capital, Population Growth, Population Size, Endogenous Growth, Level Effect, Growth Effect
    JEL: C61 C62 E2 J10 O41
    Date: 2011–10–28
  9. By: Daron Acemoglu; David Autor
    Abstract: Goldin and Katz’s <i>The Race between Education and Technology</i> is a monumental achievement that supplies a unified framework for interpreting how the demand and supply of human capital have shaped the distribution of earnings in the U.S. labor market over the 20th century. This essay reviews the theoretical and conceptual underpinnings of this work and documents the success of Goldin and Katz’s framework in accounting for numerous broad labor market trends. The essay also considers areas where the framework falls short in explaining several key labor market puzzles of recent decades and argues that these shortcomings can potentially be overcome by relaxing the implicit equivalence drawn between workers’ skills and their job tasks in the conceptual framework on which Goldin and Katz build. The essay argues that allowing for a richer set of interactions between skills and technologies in accomplishing job tasks both augments and refines the predictions of Goldin and Katz’s approach and suggests an even more important role for human capital in economic growth than indicated by their analysis.
    JEL: J30 J31 O14 O31 O33
    Date: 2012–02
  10. By: Galor, Oded (Brown University)
    Abstract: Conventional wisdom about the relationship between income distribution and economic development has been subjected to dramatic transformations in the past century. While classical economists advanced the hypothesis that inequality is beneficial for growth, the neoclassical paradigm dismissed the classical hypothesis and suggested that income distribution has limited role in the growth process. A metamorphosis in these perspectives has taken place in the past two decades. Theory and subsequent empirical evidence have demonstrated that income distribution has a significant impact on human capital formation and the development process. In early stages of industrialization, as physical capital accumulation was a prime engine of growth, inequality enhanced the process of development by channeling resources towards individuals whose marginal propensity to save is higher. In later stages of development, however, as human capital has become a main engine of growth, equality, in the presence of credit constraints, has stimulated human capital formation and growth. Moreover, unequal distribution of land has been a hurdle for economic development. While industrialists have had an incentive to support education policies that foster human capital formation, landowners, whose interests lay in the reduction of the mobility of their labor force, have favored policies that deprived the masses of education.
    Keywords: inequality, human capital, growth, development, credit market imperfections
    Date: 2012–01
  11. By: Gibbs, Michael (University of Chicago)
    Abstract: A large, mature and robust economic literature on pay for performance now exists, which provides a useful framework for thinking about pay for performance systems. I use the lessons of the literature to discuss how to design and implement pay for performance in practice.
    Keywords: incentives, pay for performance, performance measurement, subjective evaluation
    JEL: M52 J33 M12 L81
    Date: 2012–01
  12. By: Friesen, Julia; Baten, Jörg; Prayon, Valeria
    Abstract: This paper traces the human capital development of 14 Asian countries for the period of 1900-60, using the age-heaping method. We place special emphasis on the gender gap in numeracy and its determinants. In particular, we test the validity of a U-hypothesis of gender equality, implying that gender equality in numeracy declines at initial stages of development and increases again with higher numeracy levels. The U-shaped pattern is strongly confirmed by our data. --
    Keywords: human capital,age-heaping,education,gender inequality,numeracy,development,asia
    JEL: I21 N35 O15
    Date: 2012
  13. By: Franta, Michal (Czech National Bank); Guzi, Martin (IZA)
    Abstract: We explore a potential source of human capital spatial disparities: the unequal access to tertiary education caused by the absence/presence of a local university. Because the entrance to a university is a sequential process in the Czech Republic we model both a student's decision to apply to a university and the admission process. Two possible sources of unequal access to university are distinguished: cost savings and informational advantages for those residing close to a university. Estimation results suggest that the presence of a university per se is not driving student's decision to apply. Further we find that information advantage due to university proximity plays a significant role in the admission process. However this advantage is specific to the field of study, and becomes stronger in the case of highly oversubscribed study fields. To equalize the chance of admission, policy makers should consider geographical expansion of the system of universities accompanied by the expansion of university programs.
    Keywords: human capital, spatial distribution, access to tertiary education
    JEL: I20 I21 J24
    Date: 2012–01
  14. By: Pugatch, Todd (Oregon State University)
    Abstract: Re-enrollment in school following a period of dropout is a common feature of the South African school to work transition that has been largely ignored in both the literature on South Africa and the wider literature on sequential schooling choice. In this paper, I quantify the importance of the option to re-enroll in the school to work transition of South African youth. I estimate a structural model of schooling choice in South Africa using a panel dataset that contains the entire schooling and labor market histories of sampled youth. Estimates of the model's structural parameters confirm the hypothesis that enrollment choices reflect dynamic updating of the relative returns to schooling versus labor market participation. In a policy simulation under which re-enrollment prior to high school completion is completely restricted, the proportion completing at least 12 years of schooling rises 6 percentage points, as youth who would have dropped out under unrestricted re-enrollment reconsider the long-term consequences of doing so. The results suggest that the option to re-enroll is an important component of the incentives South African youth face when making schooling decisions.
    Keywords: human capital investment, labor supply, youth unemployment, dynamic discrete choice, South Africa
    JEL: I21 J24 O12
    Date: 2012–01
  15. By: Reinshagen, Felix
    Abstract: We consider a model of moral hazard with limited liability of the agent and effort that is two-dimensional. One dimension of the agent’s effort is observable and the other is not. The principal can thusmake the contract conditional not only on outcome but also on observable effort. The principal’s optimal contract gives the agent no rent and – in contrast to the first-best allocation – uses toomuch observable effort and too little unobservable effort. This distortion in the relative use of the two kinds of effort increases if the agent’s liability becomes more limited.
    Keywords: moral hazard; two-dimensional effort; regulation
    JEL: D82 D86 K32
    Date: 2012–02
  16. By: BARTOLINI Stefano; BILANCINI Ennio
    Abstract: We investigate the relationship between social participation and the hours worked in the market. Social participation is the component of social capital that measures individuals’ engagement in groups, associations and non-governmental organizations. We provide a model of consumer choice where social participation may be either a substitute or a complement to material consumption – depending on whether participation is instrumentally or non-instrumentally motivated – and where a local environment with greater social participation increases the return to individual participation. We carry out an empirical investigation of this framework using survey data on United States for the period 1972-2004. We find that non-instrumental social participation substantially decreases the hours worked, while instrumental social participation substantially increases them. Moreover, evidence is consistent with the idea that a local environment with greater social participation fosters individual social participation.
    Keywords: social participation; relational goods; social capital; work hours; instrumental and non-instrumental motivations
    JEL: A13 D62 J22 Z13
    Date: 2011–12
  17. By: Avner Ben-Ner (Industrial Relations Center, Carlson School of Management, University of Minnesota); Fanmin Kong (Guanghua School of Management, Peking University); Stéphanie Lluis (Department of Economics, University of Waterloo)
    Abstract: The paper addresses two broad research questions: 1. How do internal uncertainty associated with the task environment and external uncertainty arising from market volatility impact organization design? 2. What are the relationships among various elements of organization design: delegation of decision-making, incentives, monitoring, and internal labor market practices (promotion, training, employment security)? We expand on Prendergast (2002a), who challenged the conventional view of a tradeoff between risk and incentives, and build a single unified framework for answering our two research questions. Using a uniquely rich dataset that contains detailed information about the task environment of core employees and organization design at the individual, group and firms levels in 530 Minnesota firms in the mid 1990s, we first find support for Prendergast's key argument that internal uncertainty (over which employees have control) affects directly the allocation of decision-making and only indirectly incentives (via allocation of decision-making). This confirms similar findings by Foss and Laursen (2005), DeVaro and Kurtulus (2010) and Shi (2011). We also find that internal uncertainty has much impact on organization design through the choice of delegation of decision-making at the employee level, less so at the group level, and very little at the firm level, whereas external (market) uncertainty has little effect on organization design, especially at the individual and group level. Decision-making, monitoring, various internal labor market practices and incentives are strongly related to each other through substitution and complementarity.
    JEL: L20
    Date: 2011–12
  18. By: Flores-Fillol, Ricardo; Iranzo, Susana; Mañé Vernet, Ferran
    Abstract: We investigate the determinants of teamwork and workers cooperation within the firm. Up to now the literature has almost exclusively focused on workers incentives as the main determinants for workers cooperation. We take a broader look at the firm's organizational design and analyze the impact that different aspects of it might have on cooperation. In particular, we consider the way in which the degree of decentralization of decisions and the use of complementary HRM practices (what we call the .rm.s vertical organizational design) can affect workers'collaboration with each other. We test the model's predictions on a unique dataset on Spanish small and medium size firms containing a rich set of variables that allows us to use sensible proxies for workers cooperation. We find that the decentralization of labor decisions (and to a less extent that of task planning) has a positive impact on workers cooperation. Likewise, cooperation is positively correlated to many of the HRM practices that seem to favor workers'interaction the most. We also confirm the previous finding that collaborative efforts respond positively to pay incentives, and particularly, to group or company incentives.
    Keywords: Treball en equip, Incentius laborals, 331 - Treball. Relacions laborals. Ocupació. Organització del treball,
    Date: 2011
  19. By: Hammermann, Andrea (RWTH Aachen University); Mohnen, Alwine (Munich University of Technology); Nieken, Petra (University of Bonn)
    Abstract: The practical relevance of favouritism among students of the same study path is evident in lifelong memberships in fraternities or sororities or in high donations to faculties. In our study, we focus on the in-group favouritism of students by examining the trade-off of acting based on in-group favouritism or a performance signal when decisions are made about whom to choose as a team mate. The novel feature of your study is that the choice of a team mate is either benevolence or relevant to the own output. In the first scenario, only the payoff of the chosen subject changed, whereas in the second scenario, the decision affected the decider's own payoff as well as that of the chosen subject. The subjects ex ante knew the group type (path of study) of the pool of possible team mates and received a signal giving weak information about their ability regarding the task. Intuitively, one would expect more favouritism if the own payoff was not affected by the performance of the chosen team mate. However, we found the opposite. The subjects exerted more favouritism in the revenue sharing scenario. Possibly they expected reciprocal behaviour and less free riding if they selected a team mate belonging to their own group. Interestingly, groups formed based on favouritism did not perform significantly different from groups formed based on the performance signal.
    Keywords: lab experiment, favouritism, teams
    JEL: C92 D03 J71 M51
    Date: 2012–01
  20. By: Sheremeta, Roman M. (Chapman University); Wu, Steven Y. (Purdue University)
    Abstract: We use experiments to test comparative statics predictions of canonical tournament theory. Both the roles of principal and agent are populated by human subjects, allowing us to test predictions for both incentive responses and optimal tournament design. Consistent with theory, we observed an incentive effect from raising the winner's prize. However, we also observed several empirical puzzles that appeared to contradict theory. Controlling for social preferences did not resolve the puzzles, although social preferences do influence behavior. It turns out that the puzzles can be explained by the canonical model once the textbook assumption of separable agent utility is relaxed.
    Keywords: tournaments, experiment, social preferences, contract theory
    JEL: D03 D82 D86 M52 M55
    Date: 2012–01
  21. By: Moldaschl, Manfred; Weber, Wolfgang
    Abstract: Many economists and psychologists refuse the idea that behaviour could be based on any other motives than selfish and hedonistic ones, at least in the context of economy, mainly based on a methodological premise, not so often on empirical research. The corresponding image of man that is inherent in exchange theories and expectancy-value theories has had a strong influence on research over the last decades. Despite this, concepts like Organizational Citizenship or Corporate Identity are in search of potentials concerning voluntary work engagement. And in the 'civil society' practical campaigns are looking for voluntary workers who help compensate socially disintegrative effects of capitalism without adjectives (Vaclac Klaus) and give people back meaning in self-determined work. These are two very different things which are deeply linked though. In this article we address this difference, criticize the concepts like Organizational Citizenship Behaviour (OCB), discuss concepts of prosocial work motivation and organizational democracy, and bind this all together in a conceptual alternative of mutualistic-prosocial work orientation. --
    Date: 2011
  22. By: Balafoutas, Loukas (University of Innsbruck); Lindner, Florian (University of Innsbruck); Sutter, Matthias (University of Innsbruck)
    Abstract: Many tournaments are plagued by sabotage among competitors. Typically, sabotage is welfare-reducing, but from an individual's perspective an attractive alternative to exerting positive effort. Yet, given its illegal and often immoral nature, sabotage is typically hidden, making it difficult to assess its extent and its victims. Therefore, we use data from Judo World Championships, where a rule change in 2009 basically constituted a natural experiment that introduced one costless opportunity for sabotage. In Judo, competitors can break an opponent's attack in an unsportsmanlike manner; these are seen as acts of sabotage. Based on a unique dataset of 1,422 fights, we find that the rule change in 2009 has led to a large increase in the use of sabotage. Moreover, sabotage is more likely to be employed by relatively less qualified individuals, and to be targeted at more qualified ones. From a survey among spectators, we show that sabotage is welfare-reducing.
    Keywords: tournaments, sabotage, Judo, natural experiment
    JEL: C93 D03 L83 M51 M52
    Date: 2012–01
  23. By: Benabou, Roland (Princeton University); Tirole, Jean (IDEI)
    Abstract: This paper analyzes how private decisions and public policies are shaped by personal and societal preferences ("values"), material or other explicit incentives ("laws") and social sanctions or rewards ("norms"). It first examines how honor, stigma and social norms arise from individuals' behaviors and inferences, and how they interact with material incentives. It then characterizes optimal incentive-setting in the presence of norms, deriving in particular appropriately modified versions of Pigou and Ramsey taxation. Incorporating agents' imperfect knowledge of the distribution of preferences opens up to analysis several new questions. The first is social psychologists' practice of "norms-based interventions", namely campaigns and messages that seek to alter people's perceptions of what constitutes "normal" behavior or values among their peers. The model makes clear how such interventions operate, but also how their effectiveness is limited by a credibility problem, particularly when the descriptive and prescriptive norms conflict. The next main question is the expressive role of law. The choices of legislators and other principals naturally reflect their knowledge of societal preferences, and these same "community standards" are also what shapes social judgements and moral sentiments. Setting law thus means both imposing material incentives and sending a message about society's values, and hence about the norms that different behaviors are likely to encounter. The analysis, combining an informed principal with individually signaling agents, makes precise the notion of expressive law, determining in particular when a weakening or a strengthening of incentives is called for. Pushing further this logic, the paper also sheds light on why societies are often resistant to the message of economists, as well as on why they renounce certain policies, such as "cruel and unusual punishments", irrespective of effectiveness considerations, in order to express their being "civilized".
    Keywords: motivation, incentives, esteem, reputation, honor, stigma, social norms, culture, taxation, law, punishments, norms-based interventions, expressive content
    JEL: D64 D82 H41 K1 K42 Z13
    Date: 2012–01
  24. By: Boguslawa Sardinha (Departamento de Economia e Gestão, Instituto Politécnico de Setúbal, Portugal); Cesaltina Pacheco Pires (CEFAGE-UE, Departamento de Gestão, Universidade de Évora, Portugal)
    Abstract: This paper uses data from the 4th wave of the European Values Survey (EVS) to investigate the factors that in?uence the decision to participate in volunteering activities, considering both volunteering in general as well as volunteering in particular types of activities. Like previous studies we include several socioeconomic and demographic variables. However our study also includes attitudinal variables and country dummy variables that capture the impact of country speci?c factors. Our results show that there are signi?cant differences across countries in the propensity for volunteering and that the determinants of volunteeringare quite di¤erent for the various types of volunteering.
    Keywords: Volunteer labor; European Values Survey; Nonpro?t organizations.
    JEL: D12 H41 L31
    Date: 2011

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