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on Human Capital and Human Resource Management |
| By: | Danilov, Anastasia (University of Cologne); Sliwka, Dirk (University of Cologne) |
| Abstract: | We investigate whether incentive schemes signal social norms and thus affect behavior beyond their direct economic consequences. A principal-agent experiment is studied in which prior to contract choice principals are informed about past actions of other agents and thus have more information about "norms of behavior". Compared to a setting with uninformed principals agents exert nearly 50% higher efforts under a fixed wage contract when an informed principal had chosen this contract. Apparently the informed principal's choice signals a norm not to exploit the trust which leads to more trustworthy behavior. This mechanism's robustness is explored in further experiments. |
| Keywords: | social norms, contracts, incentives, signaling, experiments |
| JEL: | D03 C91 D86 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7477&r=hrm |
| By: | Ebru Isgin (West Chester University); Barry Sopher (Rutgers University) |
| Abstract: | The paper studies the role of information transparency on fairness concerns,welfare and efficiency. When the firm's productivity and ultimately profits are revealed, wage offers induce relatively fair divisions of potential gains and workers respond with higher performance. Workers respond not only to wages but also to firms' intentions concerning fairness. Information transparency serves as a mechanism that promotes fairness and performance while the lack of transparency results in reduced earnings for workers and market inefficiency. |
| Keywords: | Experiments, Incomplete Contracts, Fairness, Information Transparency |
| JEL: | C9 D8 J |
| Date: | 2013–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:201303&r=hrm |
| By: | Avdic, Daniel (Uppsala University); Johansson, Per (IFAU) |
| Abstract: | Women are on average more absent from work for health reasons than men. At the same time, they live longer. This conflicting pattern suggests that part of the gender difference in health-related absenteeism arises from differences between the genders unrelated to actual health. An overlooked explanation could be that men and women's preferences for absenteeism differ, for example because of gender differences in risk preferences. These differences may originate from the utility-maximizing of households in which women's traditional dual roles influence household decisions to invest primarily in women's health. Using detailed administrative data on sick leave, hospital visits and objective health measures we first investigate the existence of gender-specific preferences for absenteeism and subsequently test for the household investment hypothesis. We find evidence for the existence of gender differences in preferences for absence from work, and that a non-trivial part of these preference differences can be attributed to household investments in women's health. |
| Keywords: | sickness absence, gender norms, health investments |
| JEL: | J22 D13 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7480&r=hrm |
| By: | John Bone (University of York); Paolo Crosetto (Max Planck Institute of Economics, Jena); John D. Hey (University of York); Carmen Pasca (University of York) |
| Abstract: | This paper reports an experiment designed to elicit social preferences over income compensation schemes, where income differences between subjects have two independent components: one due to chosen effort and the other due to random chance. These differences can be compensated through social dividends, according to principles chosen beforehand by subjects themselves from behind a stylised Rawlsian veil of ignorance, or outside the society on which the principles will be implemented. We test the attractiveness in particular of Luck Egalitarianism, compensating inequalities due to chance but not those due to choice. We find modest but not overwhelming support for these principles, suggesting that subjects' actual preferences are more complex. |
| Keywords: | chance, choice, envy-freeness, fairness, luck, luck egalitarianism, responsibility |
| JEL: | D31 D63 C91 |
| Date: | 2013–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-029&r=hrm |
| By: | Neil T.N. Ferguson (Stockholm International Peace Research Institute); Maren M. Michaelsen (Ruhr University Bochum) |
| Abstract: | The relationship between deprivation and educational outcomes has been the subject of a long-running and deep debate in the economic literature. Recent discussions have focused on causality, with experimental and quasi-experimental approaches taken, yet, predominantly, the literature continues to proxy deprivation with measures of wealth. This paper explores a much wider measure and identifies a causal relationship between regional deprivation and school performance in Northern Ireland. Combining panel data on Key Stage II results from each of Northern Ireland's primary schools with the 2005 Northern Ireland Multiple Deprivation Measure, we show the net negative impact of this wider measure, whilst an extension explores the impacts of each single domain. Using an error-component two-stage least squares model, we account for school and neighbourhood selection and the potential endogeneity of our deprivation measure, showing spatial variation in historical violence, which occurred during “The Troubles”, to be a valid instrument for deprivation. Our results confirm the negative impact of deprivation frequently found in the literature but also that, when the impacts of other deprivation domains are accounted for, education and crime deprivation, and not financial deprivation, play a significant role in determining outcomes. This confirms the limitations of using wealth as a proxy for neighbourhood deprivation, whilst suggesting that policies focusing only on income redistribution will be unsuccessful in improving education outcomes of those exposed to deprivation. |
| Keywords: | Violent Conflict, Regional Deprivation, Human Capital Accumulation, Northern Ireland |
| JEL: | I24 R23 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:151&r=hrm |
| By: | Erin M. Johnson; M. Marit Rehavi |
| Abstract: | This paper provides new evidence on the interaction between patient information and financial incentives in physician induced demand (PID). Using rich microdata on childbirth, we compare the treatment of physicians when they are patients with that of comparable non-physicians. We exploit a unique institutional feature of California to determine how inducement varies with obstetricians' financial incentives. Consistent with PID, physicians are almost 10 percent less likely to receive a C-section, with only a quarter of this effect attributable to differential sorting of patients to hospitals or obstetricians. Financial incentives have a large effect on C-section probabilities for non-physicians, but physician-patients are relatively unaffected. Physicians also have better health outcomes, suggesting overuse of C-sections adversely impacts patient health. |
| JEL: | I10 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19242&r=hrm |
| By: | Pottenger, Mike (University of Melbourne); Leigh, Andrew (Australian National University) |
| Abstract: | Outside the US, little is known of long-run trends in executive compensation. We fill this gap by studying BHP, a resources giant that has long been one of the largest companies on the Australian stock market. From 1887 to 2013, trends in CEO and director remuneration (relative to average earnings) follow a U-shape. This matches the pattern for US executive compensation, Australian top incomes, and (for the past two decades) average trends in executive compensation in top Australian firms. Like the US, Australia experienced a post-war 'great compression' prior to the recent 'great divergence'. |
| Keywords: | executive remuneration, inequality, income distribution |
| JEL: | D31 J31 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7486&r=hrm |
| By: | Marco Faravelli; Luca Stanca |
| Abstract: | This paper provides a direct test of the hypothesis that agents' objective functions are non-separable in economic incentives and social preferences. We study experimentally fixed-prize contests using a 2x2 design, varying orthogonally the degree of competition of the incentive mechanism (all-pay auction vs. lottery) and the presence or absence of social returns to bidding (rent seeking vs. public good). The results indicate that either stronger competition or positive social returns have positive main effects on bids. In addition, we find a negative interaction between the all-pay auction mechanism and the public good environment, leading us to reject separability. This finding provides causal evidence that economic incentives may negatively affect pro-social behavior. |
| Keywords: | Contests, Public goods, Rent-seeking, Social preferences, Separability, Laboratory experiments |
| JEL: | C91 D44 H41 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:250&r=hrm |
| By: | Butler, Jerey V.; Conzo, Pierluigi; Leroch, Martin A. (University of Turin) |
| Abstract: | Third party punishment is crucial for sustaining cooperative behavior. Still, little is known about its determinants. In this paper we use laboratory experiments to investigate a long-conjectured interaction between group identication and bystanders' punishment preferences using a novel measure of these preferences. We induce minimal groups and give a bystander the opportunity to punish the perpetrator of an unfair act against a defenseless victim. We elicit the bystander's valuation for punishment in four cases: when the perpetrator, the victim, both or neither are members of the bystander's group. We generate testable predictions about the rank order of punishment valuations from a simple framework incorporating group-contingent preferences for justice which are largely conrmed. Finally, we conduct control sessions where groups are not induced. Comparing punishment across treatment and control suggests that third-party punishers tend to treat others as in-group members unless otherwise divided. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201329&r=hrm |
| By: | Najy Benhassine; Florencia Devoto; Esther Duflo; Pascaline Dupas; Victor Pouliquen |
| Abstract: | Conditional Cash Transfers (CCTs) have been shown to increase human capital investments, but their standard features make them expensive. We use a large randomized experiment in Morocco to estimate an alternative government-run program, a “labeled cash transfer” (LCT): a small cash transfer made to fathers of school-aged children in poor rural communities, not conditional on school attendance but explicitly labeled as an education support program. We document large gains in school participation. Adding conditionality and targeting mothers make almost no difference. The program increased parents’ belief that education was a worthwhile investment, a likely pathway for the results. |
| JEL: | H52 I21 I38 O15 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19227&r=hrm |