nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2012‒05‒29
ten papers chosen by
Tommaso Reggiani
Universita' di Bologna

  1. A "Glass-Ceiling" Effect for Immigrants in the Italian Labour Market? By Dell'Aringa, Carlo; Lucifora, Claudio; Pagani, Laura
  2. Urban agglomeration and CEO compensation By Francis, Bill; Hasan, Iftekhar; John, Kose; Waisman , Maya
  3. Active Ageing Beyond the Labour Market: Evidence on Work Environment Motivations By Catherine Pollak; Nicolas Sirven
  4. The Wages of Sinistrality: Handedness, Brain Structure and Human Capital Accumulation By Goodman, Joshua Samuel
  5. Literacy at South African Mission Stations By Johan Fourie; Robert Ross; Russel Viljoen
  6. Piecework versus merit pay: a Mean Fi eld Game approach to academic behavior By Damien Besancenot; Jean-Michel Courtault; Khaled El Dika
  7. Who pays for it? The Heterogeneous Wage Effects of Employment Protection Legislation By Marco Leonardi; Giovanni Pica
  8. Full Disclosure in Decentralized Organizations By Jeanne Hagenbach; Frédéric Koessler
  9. Ingratiation and Favoritism: Experimental Evidence By Stéphane Robin; Agnieszka Rusinowska; Marie-Claire Villeval
  10. Developing Managers and Leaders: Experiences and Lessons from International NGOs By Jayawickrama, Sherine S

  1. By: Dell'Aringa, Carlo (Università Cattolica del Sacro Cuore); Lucifora, Claudio (Università Cattolica del Sacro Cuore); Pagani, Laura (University of Milan Bicocca)
    Abstract: This paper investigates earnings differentials between immigrants and natives. We focus on returns and on the (imperfect) international transferability of human capital. Data are drawn from the 2009 Italian Labour Force Survey (LFS). We show that returns to human capital are considerably lower for immigrants as compared to natives and that there is no return to pre-immigration work experience, suggesting imperfect transferability of human capital. We also explored the role of human capital, for immigrants and natives, in explaining inter-occupational and intra-occupational earnings progression (differentials). Our findings suggest that the returns on human capital (main source of wage progression) for immigrants (is) are mainly driven by intra-occupational earnings progression. Moreover, and contrary to what is observed for natives, we detect through quantile analysis a "glass-ceiling" effect for immigrant workers, who appear to face a large penalty in accessing high paying occupations. A number of robustness checks confirm our main results.
    Keywords: migration, earnings, human capital portability, occupational attainment, wage differentials, human capital
    JEL: J31 J24 J61 F22
    Date: 2012–05
  2. By: Francis, Bill (Rensselaer Polytechnic Institute); Hasan, Iftekhar (Fordham University and Bank of Finland); John, Kose (Stern School of Business, New York University); Waisman , Maya (Fordham University – Finance Area)
    Abstract: An underlying assumption in the executive compensation literature is that there is a national labor market for CEOs. The urban economics literature, however, documents higher ability among workers in large metropolitans, which results in a real and stable urban wage premium. In this paper, we investigate the link between the spatial clustering of firms in big, central cities (i.e., urban agglomeration) and the level and structure of CEO compensation. Using CEO compensation data for the period 1992–2004, we document a positive relation between the size and centrality of the city in which the firm is headquartered and the total, as well as the equity based portion of CEO pay. Our results are robust to a host of control variables, sensitivity and endogeneity tests, indicating that urban agglomeration may reflect positive externalities, such as knowledge spillovers, business connections and improved access to private information that have a positive effect on CEO pay and incentive driven compensation for good performance. We document gradual human capital gains acquired from big city work experience that are transferable to the rural area, and rewarded for, once the CEO relocates into a smaller, less central community. Our tests provide novel evidence of information spillovers and networking opportunities in big cities that can directly affect how CEOs are compensated. Such sources of information and influence represent something for which firms are willing to pay higher and more incentive driven pay, evidence in favor of a market-based explanation for CEO compensation.
    Keywords: agglomeration; CEO; compensation; incentive; geography
    JEL: D83 G30 J31 R12
    Date: 2012–04–19
  3. By: Catherine Pollak (IRDES institut for research and information in health economics); Nicolas Sirven (IRDES institut for research and information in health economics)
    Abstract: “Active Ageing” strategies aim to foster the participation of seniors in the society. Although economic literature has extensively studied the incentives for seniors to increase their labour supply, little is known about the motivations for older people to complement labour with other forms of social participation. Using data from the Survey of Health, Ageing and Retirement in Europe, this article provides empirical evidence of the motivational role of the work environment in the supply of formal and informal productive activities of 50 to 65 year old workers. The results show that intrinsic rewards received at work, such as skill development opportunities and decision latitude, form an incentive for older workers to invest time in social activities outside the labour market. Extrinsic rewards on the other hand, like advancement perspectives, job security and pay, appear independent from non-market outcomes. Therefore, the opportunity for work time arrangements but also intrinsic rewards in the work environment should be developed if one aims to foster participation of older workers in the society.
    Keywords: Labour supply, Job quality, Social capital, Informal care.
    JEL: J81 J22 J14 C35
    Date: 2012–05
  4. By: Goodman, Joshua Samuel
    Abstract: Left- and right-handed individuals have different brain structures, particularly in relation to language processing. Using five data sets from the US and UK, I show that poor infant health increases the likelihood of a child being left-handed. I argue that handedness can thus be used to explore the long-run impacts of differential brain structure generated in part by poor infant health. Even conditional on infant health and family background, lefties exhibit economically and statistically significant human capital deficits relative to righties. Compared to righties, lefties score a tenth of a standard deviation lower on measures of cognitive skill and, contrary to popular wisdom, are not over-represented at the high end of the distribution. Lefties have more emotional and behavioral problems, have more learning disabilities such as dyslexia, complete less schooling, and work in less cognitively intensive occupations. Differences between left- and right-handed siblings are similar in magnitude. Most strikingly, lefties have six percent lower annual earnings than righties, a gap that can largely be explained by these differences in cognitive skill, disabilities, schooling and occupational choice. Lefties work in more manually intensive occupations than do righties, further suggesting that lefties’ primary labor market disadvantage is cognitive rather than physical. Those likely be left-handed due to genetics show smaller or no deficits relative to righties, suggesting the importance of environmental shocks as the source of disadvantage. Handedness provides parents and schools a costlessly observable characteristic with which to identify young children whose cognitive and behavioral development may warrant additional attention.
    Date: 2012
  5. By: Johan Fourie; Robert Ross; Russel Viljoen
    Abstract: Accurate measures of education quality — primarily, years of schooling or literacy rates — are widely used to ascertain the contribution of human capital formation on long-run economic growth and development. This paper, using a census of 4500 missionary station residents in 1849 South Africa, documents, for the first time, literacy and numeracy rates of non-White citizens in nineteenth-century South Africa. The census allows for an investigation into the causes of literacy at missionary stations. We find that age, residency, the missionary society operating the stations and numeracy, as a proxy for parental education, matter for literacy performance. The results provide new insights into the comparative performance of missionary societies in South Africa and contribute to the debate about the role of missionary societies in the economic development of colonial settings.
    Date: 2012
  6. By: Damien Besancenot (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris XIII - Paris Nord - CNRS : UMR7234); Jean-Michel Courtault (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris XIII - Paris Nord - CNRS : UMR7234); Khaled El Dika (LAGA - Laboratoire d'Analyse, Géométrie et Applications - CNRS : UMR7539 - Université Paris XIII - Paris Nord - Université Paris VIII - Vincennes Saint-Denis)
    Abstract: This paper applies the Mean Fi eld Game approach pioneered by Lasry and Lions (2007) to the analysis of the researchers' academic productivity. It provides a theoretical motivation for the stability of the universaly observed Lotka's law. It shows that a remuneration scheme taking into account the researchers rank with respect to the academic resume can induce a larger number of researchers to overtake a minimal production standard. It thus appears as superior to piecework remuneration.
    Keywords: Mean Field Game, Academic production, incentives, Lotka's law.
    Date: 2011–10–13
  7. By: Marco Leonardi; Giovanni Pica
    Abstract: This paper estimates the effect of employment protection legislation (EPL) on workers' individual wages in a quasi-experimental setting, exploiting a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees and left firing costs unchanged for bigger firms. Accounting for the endogeneity of the treatment status, we find that the slight average wage reduction (between -0:4 and -0:1 percent) that follows the increase in EPL hides highly heterogeneous effects. Workers who change firm during the reform period suffer a drop in the entry wage, while incumbent workers are left unaffected. Results also indicate that the negative wage effect of the EPL reform is stronger on young blue collars and on workers at the low-end of the wage distribution. Finally, workers in low-employment regions suffer higher wage reductions after the reform. This pattern suggests that the ability of the employers to shift EPL costs onto wages depends on workers' and firms' relative bargaining power.
    Date: 2012
  8. By: Jeanne Hagenbach (Ecole Polytechnique - Ecole Polytechnique); Frédéric Koessler (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We characterize sufficient conditions for full and decentralized disclosure of hard information in organizations with asymmetrically informed and self interested agents with quadratic loss functions. Incentive conflicts arise because agents have different (and possibly interdependent) ideal actions and different incentives to coordinate with each others. A fully revealing sequential equilibrium exists in the disclosure game if each player's ideal action is monotonic in types and types are independently distributed, but may fail to exist with non-monotonic ideal actions or correlated types. When biases between players' ideal actions are constant across states, complete information is the Pareto dominant information structure. In that case, there is a fully revealing sequential equilibrium in which informational incentive constraints are satisfied ex-post, so it exists for all possible prior beliefs, even when players' types are correlated. This existence result applies whether information disclosure is private or public, and is extended to partial certifiability of information.
    Keywords: Certifiable types ; Coordination ; Information disclosure ; Multi-divisional organizations
    Date: 2011–12
  9. By: Stéphane Robin (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne); Marie-Claire Villeval (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon)
    Abstract: We provide experimental evidence of workers' ingratiation by opinion conformity and of managers' discrimination in favor of workers with whom they share similar opinions. In our Baseline, managers can observe both workers' performance at a task and opinions before assigning unequal payoffs. In the Ingratiation treatment, workers can change their opinion after learning that held by the manager. In the Random treatment, workers can also change opinion but payoffs are assigned randomly, which gives a measure of non-strategic opinion conformism. We find evidence of high ingratiation indices, as overall, ingratiation is effective. Indeed, managers reward opinion conformity, and even more so when opinions cannot be manipulated. Additional treatments reveal that ingratiation is cost sensitive and that the introduction of performance pay for managers as well as a less noisy measure of performance increase the role of relative performance in the assignment of payoffs, without eliminating the reward of opinion conformity.
    Keywords: Ingratiation; opinion conformity; favoritism; discrimination; social distance; experiment
    Date: 2012–05–03
  10. By: Jayawickrama, Sherine S
    Abstract: This paper explores the context, practice and lessons related to management and leadership development in a handful of large international NGOs (INGOs) focused on humanitarian and development efforts. The paper is based on eighteen semi-structured interviews with senior managers of human resources or organizational development at INGOs including ActionAid, CARE, Catholic Relief Services, Habitat for Humanity, Médecins Sans Frontières, Mercy Corps, Oxfam, Save the Children and World Vision. It describes how INGOs (individually and collectively) are addressing the challenge of developing strong managers and leaders, what some promising approaches in management and leadership development currently are, what lessons can be learned from past and ongoing experiences in management and leadership development, what challenges and priorities remain, and whether and how academic institutions might be a resource.
    Date: 2011

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