nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2012‒11‒17
fourteen papers chosen by
Tommaso Reggiani
University of Cologne

  1. Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough By Joaquín Gómez-Miñambres; Brice Corgnet; Roberto Hernán González
  2. Employers' selection behavior during short-time work By Scholz, Theresa
  3. Competitive incentives: working harder or working smarter? By Anat Bracha; Chaim Fershtman
  4. Human capital mobility and convergence : a spatial dynamic panel model of the German regions By Kubis, Alexander; Schneider, Lutz
  5. Asymmetric information and overeducation By Mendolicchio, Concetta; Paolini, Dimitri; Pietra, Tito
  6. Unfair tournaments: gender stereotyping and wage discrimination among Italian graduates By Carolina Castagnetti; Luisa Rosti
  7. Incentive Schemes in Export and Investment Promotions By Leandro Arozamena; Federico Weinschelbaum
  8. Incentive Effects on Efficiency in Education Systems’ Performance By Giuseppe Coco; Raffaele Lagravinese
  9. Promotion Determinants in Corporate Hierarchies: An Examination of Fast Tracks and Functional Area By Belzil, Christian; Bognanno, Michael; Poinas, François
  10. Gone Fishing! Reported Sickness Absenteeism and the Weather By Jingye Shi; Mikal Skuterud
  11. The Relation between Equity Incentives and Misreporting: The Role of Risk-Taking Incentives By Armstrong, Christopher S.; Larcker, David F.; Ormazabal, Gaizka; Taylor, Daniel J.
  12. Relative Quality of Foreign Nurses in the United States By Patricia Cortés; Jessica Pan
  13. Career barriers for women executives and the Glass Ceiling Syndrome: the case study comparison between French and Turkish women executives. By Cansu Akpinar
  14. Claiming Authority: How Women Explain Their Ascent to Top Business Leadership Positions By Bowles, Hannah Riley

  1. By: Joaquín Gómez-Miñambres (Economic Science Institute, Chapman University); Brice Corgnet (Argyros School of Business and Economics, Chapman University); Roberto Hernán González (Universidad de Granada, Department of Economic Theory and Economic History)
    Abstract: The aim of this paper is to test the effectiveness of wage-irrelevant goal setting policies in a laboratory environment. In our design, managers can assign a goal to their workers by setting a certain level of performance on the work task. To establish our theoretical conjectures we develop a model where assigned goals act as reference points to workers’ intrinsic motivation, creating a sense of gain when attained and a sense of loss when not attained. Consistent with our theoretical framework, we find evidence that managers set goals that are challenging but attainable for an average-ability worker. Workers respond to these goals by increasing effort, performance and by decreasing on-the-job leisure activities with respect to the no-goal setting baseline. We study the interaction between goal setting and monetary rewards by considering different values for the monetary incentives involved in completing the task. Interestingly, we find that goal setting is especially effective when monetary incentives are strong. These results suggest that goal setting may foster workers’ intrinsic motivation and increase their level of performance beyond what is achieved using solely monetary incentives.
    Keywords: Intrinsic motivation, incentives, goal-setting, reference dependent preferences, virtual organizations.
    JEL: C92 D23 M54
    Date: 2012
  2. By: Scholz, Theresa (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "During the recession of 2008-09 Germany experienced a huge decrease in GDP. Employment, however, remained surprisingly stable. The so-called German labor market miracle is often ascribed to the intensive usage of short-time work. Despite the resurgence of this instrument, little is known about the employees affected by it. This paper analyzes whether employers select certain individuals for short-time work, where special focus is given on the effect of human capital. The analysis is based on a unique linked-employer-employee data set on short-time workers in the district of the employment agency of Nuremberg. We use methods of event history analysis to estimate transition rates from regular employment to short-time work. Our results indicate that employers select a broad range of workers for STW, irrespective of their level of human capital. Fears that short-time work is mainly applied to a certain group of workers are not confirmed." (Author's abstract, IAB-Doku) ((en))
    Keywords: Kurzarbeit, Personalauswahl, Beschäftigtenstruktur, Entlassungen, Wirtschaftskrise, Rezession, Qualifikationsstruktur, Arbeitnehmer, IAB-Betriebs-Historik-Panel, Integrierte Erwerbsbiografien, Geschlechterverteilung, Altersstruktur, Nürnberg, Bayern, Bundesrepublik Deutschland
    JEL: J23 J24 J3
    Date: 2012–08–15
  3. By: Anat Bracha; Chaim Fershtman
    Abstract: Almost all jobs require a combination of cognitive effort and labor effort. This paper focuses on the effect that competitive incentive schemes have on the chosen combination of these two types of efforts. We use an experimental approach to show that competitive incentives may induce agents to work harder but not necessarily smarter. This effect was stronger for women.
    Keywords: Competition
    Date: 2012
  4. By: Kubis, Alexander (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schneider, Lutz
    Abstract: "Since the fall of the iron curtain in 1989, the migration deficit of the Eastern part of Germany has accumulated to 1.8 million people, which is over 10 percent of its initial population. Depending on their human capital endowment, these migrants might either - in the case of low-skilled migration - accelerate or - in high-skilled case - impede convergence. Due to the availability of detailed data on regional human capital, migration and productivity growth, we are able to test how geographic mobility affects convergence via the human capital selectivity of migration. With regard to the endogeneity of the migration flows and human capital, we apply a dynamic panel data model within the framework of ß-convergence and account for spatial dependence. The regressions indicate a positive, robust, but modest effect of a migration surplus on regional productivity growth. After controlling for human capital, the effect of migration decreases; this decrease indicates that skill selectivity is one way that migration impacts growth." (Author's abstract, IAB-Doku) ((en))
    Keywords: Binnenwanderung, Qualifikationsniveau, regionale Disparität, Konvergenz, Zuwanderung, Abwanderung, Ostdeutschland, Westdeutschland, Bundesrepublik Deutschland
    JEL: R23 R11 C23
    Date: 2012–09–24
  5. By: Mendolicchio, Concetta (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Paolini, Dimitri; Pietra, Tito
    Abstract: "We consider an economy where production may use labor of two different skill levels. Workers are heterogeneous and, by investing in education, self-select into one of the two skills. Ex-ante, when firms choose their investments in physical capital, they do not know the level of human capital prevailing in the labor market they will be active in. We prove existence and constrained inefficiency of competitive equilibria, which are always characterized by overeducation. An increase in total expected surplus can be obtained by shrinking, at the margin, the set of workers investing in high skill. This can be implemented by imposing taxes on the cost of investing in high skill or by imposing a progressive labor earning tax." (Author's abstract, IAB-Doku) ((en))
    Keywords: ökonomische Theorie, Humankapital, Bildungsinvestitionen, Gleichgewichtstheorie
    JEL: J24 H2
    Date: 2012–06–14
  6. By: Carolina Castagnetti (Department of Economics and Management, University of Pavia); Luisa Rosti (Department of Economics and Management, University of Pavia)
    Abstract: This paper addresses the gender pay gap among Italian university graduates on entry to the labor market, and stresses the importance of gender stereotypes on subjective assessment of individual productivity. We build upon previous research about gender and wage inequality introducing tournament theory as a convenient framework for the gender pay gap analysis. We hypothesize that the effects of gender stereotypes make occupational tournaments unfair. As a consequence, male workers have higher probabilities of winning the wage competition. Our data show that in contexts where the stereotype is most likely to occur, making tournaments less fair, the unexplained component of the gender pay gap is higher.
    Keywords: Labor market, Italy, Gender pay gap, Stereotypes, Tournaments
    JEL: J24 J7 J3
    Date: 2012–10
  7. By: Leandro Arozamena; Federico Weinschelbaum
    Abstract: This study examines the use of incentive mechanisms for employees in export and investment promotion agencies intended to improve their performance. It briefly describes these organizations and presents the contributions from economic theory that are useful to understand the agency problems that arise. It proposes a framework to study the issues that need to be considered to design a sound incentive mechanism. The study concludes that such a design should be carried out carefully, analyzing all of the possible drawbacks of rewarding each measure of employee performance, and identifies the main issues that need to be resolved.
    Keywords: Labor :: Workforce & Employment, Economics :: Investment, Integration & Trade :: Trade Facilitation, Incentive Mechanisms, Employees, Export and Investment Promotion Agencies,
    JEL: D23 J24 M50
    Date: 2012–10
  8. By: Giuseppe Coco (University of Florence); Raffaele Lagravinese (University of Roma 3)
    Abstract: In the face of past ambiguous results on growth effects of education when measured through school attainment, some papers suggest that some countries may be unable to use productively their schooling output because of the scope of cronyism. We dig deeper and demonstrate that, in a stylized model, cronyism in the labour market, e.g. the ability to exert influence to gain high wage positions without merit, may impact heavily on the relationship between schooling inputs and cognitive skills, due to incentive effects. We then use a two-stage DEA approach to identify factors affecting inefficiency in education performance of OECD countries when the output is proxied by PISA scores. Along with other well known factors, a measure of corruption, our chosen proxy for cronyism, explains a substantial fraction of the inefficiency. This result suggests that, as in our model, in the presence of cronyism, incentives to cognitive skills acquisition are dampened. Analogously to developing countries but for different reasons, the best way to improve the education system performance in OECD countries may well be to fight corruption and increase transparency in labour access.
    Keywords: education, corruption, technical efficiency, DEA.
    JEL: C14 C61 D73 I21
    Date: 2012–10
  9. By: Belzil, Christian; Bognanno, Michael; Poinas, François
    Abstract: This article estimates a dynamic reduced-form model of intra-firm promotions using an employer-employee panel of over 300 of the largest corporations in the U.S. in the period from 1981 to 1988. The estimation conditions on unobserved individual heterogeneity and allows for both an endogenous initial condition and sample attrition linked to individual heterogeneity in demonstrating the relative importance of variables that influence promotion. The role of the executive's functional area in promotion is considered along with the existence and source of promotion fast tracks. We find that while the principal determinant of promotions is unobserved individual heterogeneity, functional area has a high explanatory power, resulting in promotion probabilities that differ by functional area for executives at the same reporting level and firm. No evidence is found that an executive's recent speed of advancement in pay grade has a causal impact on in- sample promotions after conditioning on the executive's career speed of advancement. For high-level executives, fast tracks appear to result from heterogeneity in persistent individual characteristics, not from an inherent benefit in recent advancement itself.
    Keywords: , promotion, fast track, functional area, dynamic discrete choice
    JEL: C33 M5 M51
    Date: 2012–10
  10. By: Jingye Shi (Research Institute of Economics and Management, Southwestern University of Finance and Economics); Mikal Skuterud (Department of Economics, University of Waterloo)
    Abstract: A fundamental challenge in informing employer-employee agency problems is measuring employee shirking activity. We identify the propensity of employees to misreport health in order to exploit favorable weather by linking Canadian weather data and survey data on short-term spells of sickness absenteeism among indoor workers during the non-winter months. The results point to a clear tendency for reported sickness absenteeism to rise with weather quality. Comparing across workers suggests larger marginal weather effects where shirking costs are higher, which we show is consistent with employees' marginal utility of outdoor leisure increasing in the interaction of their health and weather quality.
    JEL: D82 I10 J22
    Date: 2012–08
  11. By: Armstrong, Christopher S. (University of PA); Larcker, David F. (Stanford University); Ormazabal, Gaizka (University of Navarra); Taylor, Daniel J. (University of PA)
    Abstract: Prior research argues that a manager whose wealth is more sensitive to changes in the firm's stock price has a greater incentive to misreport. However, if the manager is risk-averse and misreporting increases both equity values and equity risk, the sensitivity of the manager's wealth to changes in stock price (portfolio delta) will have two countervailing incentive effects: a positive "reward effect" and a negative "risk effect." In contrast, the sensitivity of the manager's wealth to changes in risk (portfolio vega) will have an unambiguously positive incentive effect. We show that jointly considering the incentive effects of both portfolio delta and portfolio vega substantially alters inferences reported in prior literature. Using both regression and matching designs, and measuring misreporting using discretionary accruals, restatements, and SEC Accounting and Auditing Enforcement Releases, we find strong evidence of a positive relation between vega and misreporting and that the incentives provided by vega subsume those of delta. Collectively, our results suggest that equity portfolios provide managers with incentives to misreport when they make managers less averse to equity risk.
    JEL: G34 J33 M41 M52
    Date: 2012–08
  12. By: Patricia Cortés (School of Management, Boston University); Jessica Pan (National University of Singapore)
    Abstract: In recent years, the US has become increasingly reliant on foreign registered nurses to satisfy health care demands. The Philippines has emerged as the single largest source of nurses educated abroad, representing more than half of foreign nurses entering the US in the last decade. One of the main concerns raised by the importation of nurses is the quality of care that they provide. This paper addresses this question by analyzing the relative quality of foreign educated nurses and its evolution over time using Census data from 1980 to 2010 and wages as a measure of skill. We find a positive wage premium for nurses educated in the Philippines, but not for foreign nurses educated elsewhere. This premium cannot be explained by differences in demographics, education, work experience, location, or detailed job characteristics. The assimilation profile of Filipino nurses and the types of hospitals that hire them strongly suggest that the premium reflects quality differences and not just unobserved characteristics of the job that carry a higher wage but are unrelated to skill. We provide evidence that the wage premium is likely to be driven by strong positive selection into nursing among Filipinos resulting from the high and heterogeneous returns to the occupation generated by active government support for the migration of nurses in the Philippines.
    Keywords: Nurses, Migration, Selection, Skills.
    JEL: J61 J24 J44
    Date: 2012–11
  13. By: Cansu Akpinar (EA3713 - Centre de Recherche Magellan - Université de Lyon - Université Jean Moulin - Lyon III)
    Abstract: The situation where gender pay gaps are typically wider at the top of the wage distribution is known as the 'glass ceiling'. It is one of the most compelling metaphors recently used for analyzing inequality between men and women in the workplace, in order to describe a barrier to further advancement once women have attained a certain level. The general-case glass ceiling hypothesis states that not only is it more difficult for women than for men to be promoted up levels of authority hierarchies within workplaces but also that the obstacles women face relative to men become greater as they move up the hierarchy. This study presents an overview of glass-ceiling type barriers in organizations based on the perceptions of a sample of French and Turkish mid-level women managers. This study investigates how women in middle management perceive their career advancement opportunities and what they consider their organizations to be doing to support their advancement. This study begins with an introduction of the concept of a glass ceiling that prevents women from advancing, and then continues with previous studies on corporate practices and data analysis of samples from French and Turkish organizations. The objective of this work is to summarize the Glass Ceiling Phenomenon and make a comparison of different arguments of researchers. In particular with this study, It has been pointed out that most past research has been relied on indirect tests which fail to distinguish studies of the glass ceiling effect who have investigated a variety of labour market outcomes such as promotions (Powell and Butterfield 1994, Yap and Konrad(2009)), women carrier (Belgihiti Kartochian, Laufer(2004)), inequality (David J. Maume Jr.) and sex segregation (Mia Hultin 2003)
    Keywords: Glass Ceiling, Carrier Barriers, Women in Leadership
    Date: 2012
  14. By: Bowles, Hannah Riley (Harvard University)
    Abstract: Career stories of 50 female executives from major corporations and high-growth entrepreneurial ventures suggest two alternative accounts of how women legitimize their claims to top leadership positions: navigating and pioneering. In navigating accounts, the women legitimized their claims to top authority positions by following well institutionalized paths of career advancement (e.g., high performance in line jobs) and self-advocating with the gatekeepers of the social hierarchy (e.g., bosses, investors). In pioneering accounts, the women articulated a strategic vision and cultivated a community of support and followership around their strategic ideas and leadership. The career stories suggested that, when the women's authority claims were not validated, they engaged in narrative identity work to revise their aspirations and legitimization strategies. Sometimes narrative identity work motivated women to shift from one type of account to another, particularly from navigating to pioneering. Based on inductive analyses of these 50 career stories, I propose a process model of how women legitimize their claims to top leadership positions by recursively resetting career accounts as authority claims succeed or fail.
    Date: 2012–10

This nep-hrm issue is ©2012 by Tommaso Reggiani. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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