nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2013‒08‒31
fifteen papers chosen by
Tommaso Reggiani
University of Cologne

  1. Task Organization, Human Capital and Wages in Moroccan Exporting Firms By Christophe Muller; Christophe J. Nordman
  2. Human capital, social capital and organizational performance: A structural modeling approach By J. Augusto Felicio; Eduardo Couto; Jorge Caiado
  3. Organizational Control Systems and Pay-for-Performance in the Public Service By Bruno S. Frey; Fabian Homberg; Margit Osterloh
  4. Integration as a catalyst for assimilation By Stark, Oded; Jakubek, Marcin
  5. The Implications of Educational and Methodological Background for The Career Success of Nobel Laureates: Looking at Major Awards By Ho Fai Chan; Benno Torgler
  6. Status, incentives and random favouritism By Dey, Oindrila; Banerjee, Swapnendu
  7. Human Capital and Genetic Diversity By Sequeira, Tiago; Santos, Marcelo; Ferreira-Lopes, Alexandra
  8. Social Networks and Peer Effects at Work By Julie Beugnot; Bernard Fortin; Guy Lacroix; Marie Claire Villeval
  9. CEO turnover, earnings management and value relevance. A theoretical analysis on the Italian context. By John M. Barrios; Marco Fasan; Daniele Macciocchi
  10. Financial incentives and educational investment: the impact of performance-based scholarships on student time use By Lisa Barrow; Cecilia Elena Rouse
  11. Assessing education's contribution to productivity using firm-level evidence By Lara LEBEDINSKI; Vincent VANDENBERGHE
  12. Market Forces Shaping Human Capital in Eighteenth Century London By Moshe Justman; Karine van der Beek
  13. Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes By Doyle, Orla; Harmon, Colm P.; Heckman, James J.; Logue, Caitriona; Moon, Seong Hyeok
  14. Village sanitation and children's human capital : evidence from a randomized experiment by the Maharashtra government By Hammer, Jeffrey; Spears, Dean
  15. Has the Quality of Work Improved in the EU-15 between 1995 and 2005? By Nathalie Greenan; Ekaterina Kalugina; Emmanuelle Walkowiak

  1. By: Christophe Muller (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales [EHESS] - Ecole Centrale Marseille (ECM)); Christophe J. Nordman (DIAL - Développement, institutions et analyses de long terme - Institut de recherche pour le développement [IRD], IZA - Institute for the Study of Labor)
    Abstract: We conduct a case study of the linkages of task organization, human capital accumulation and wages in Morocco, using matched worker-firm data for Electrical-mechanical and Textile-clothing industries. In order to integrate task organization into the interacting processes of workers' training and remunerations, we assume a recursive model, which is not rejected by our estimates: task organization influences on-the-job training that affects wages. Beyond sector and gender determinants, assignment of workers to tasks and on-the-job training is found to depend on former education and work experience in a broad sense. Meanwhile, participation in on-the-job training is stimulated by being assigned to a team, especially of textile sector and for well-educated workers. Finally, task organization and on-the-job training are found to affect wages.
    Keywords: Morocco; wages; on-the-job training; human capital; task organization
    Date: 2013–08
  2. By: J. Augusto Felicio (School of Economics and Management (ISEG), Technical University of Lisbon); Eduardo Couto (School of Economics and Management (ISEG), Technical University of Lisbon); Jorge Caiado (CEMAPRE, School of Economics and Management (ISEG), Technical University of Lisbon)
    Abstract: This research evaluates the human capital and social capital of managers and its influence on the performance of small and medium-sized Portuguese companies. We resorted to the structural modeling methodology approach applied to a sample of 192 small and medium companies aged between four and fifteen years from five different activity sectors. It was concluded that human capital affects social capital and the experience and cognitive ability influence personal relations and complicity. The organizational performance is strongly influenced by human capital through the cognitive ability of the manager. It's an important contribution to the management literature.
    Keywords: Human capital, Social capital, Organizational performance, Cognitive ability, Small and medium enterprises
    Date: 2013–08
  3. By: Bruno S. Frey; Fabian Homberg; Margit Osterloh
    Abstract: Under certain conditions, output related performance measurement and pay-for-performance produce negative outcomes. We argue that in public service, these negative effects are stronger than in the private sector. We combine Behavioural Economics and Management Control Theory to determine under which conditions this is the case. We suggest as alternatives to the dominant output related pay-for-performance systems selection and socialization, exploratory use of output performance measures, and awards.
    Keywords: organization control; organizational forms; public administration; organizations; public service motivation
    Date: 2013–06
  4. By: Stark, Oded; Jakubek, Marcin
    Abstract: We draw a distinction between the social integration and economic assimilation of migrants, and study an interaction between the two. We define social integration as blending into the host country's society, and economic assimilation as acquisition of human capital that is specific to the host country's labor market. We show that a non-integrated migrant finds it optimal to acquire a relatively limited quantity of human capital; with fellow migrants constituting his only comparison group, a non-integrated migrant does not have a relative deprivation-based incentive to close the income gap with the natives. However, when a migrant is made to integrate, his social proximity to the natives exposes him to relative deprivation, which in turn prompts him to form more destination-specific human capital in order to increase his earnings and narrow the income gap with the natives. In this way, social integration becomes a catalyst for economic assimilation. --
    Keywords: Assimilation,Social proximity,Interpersonal comparisons,Relative deprivation,Human capital formation
    JEL: D01 F22 J15 J24 J61 O15 Z10
    Date: 2013
  5. By: Ho Fai Chan; Benno Torgler
    Abstract: Nobel laureates have achieved the highest recognition in academia, reaching the boundaries of human knowledge and understanding. Owing to past research, we have a good understanding of the career patterns behind their performance. Yet, we have only limited understanding of the factors driving their recognition with respect to major institutionalized scientific honours. We therefore look at the award life cycle achievements of the 1901 to 2000 Nobel laureates in physics, chemistry and physiology or medicine. The results show that Nobelists with a theoretical orientation are achieving more awards than laureates with an empirical orientation. Moreover, it seems their educational background shapes their future recognition. Researchers educated in Great Britain and the US tend to generate more awards than other Nobelists although there are career pattern differences. Among those, laureates educated at Cambridge or Harvard are more successful in Chemistry, those from Columbia and Cambridge excel in Physics, while Columbia educated laureates dominate in Physiology or Medicine.
    Keywords: Nobel Prize; Nobel Laureates; Awards; Recognition; Educational Background; Theory; Empirics; Chemistry; Physics; Physiology or Medicine
    JEL: M52 J33 Z13
    Date: 2013–06
  6. By: Dey, Oindrila; Banerjee, Swapnendu
    Abstract: The paper identifies a condition under which favouritism is beneficial to the principal even when the favoured agent is selected randomly. This paper also characterizes how the optimal incentive scheme changes in presence of random favouritism. Using a moral hazard framework with limited liability it is shown that in presence of favouritism principal can optimally decrease monetary incentive when the potentially favoured group size is small. Inspite of a fall in optimal effort the paper predicts that favouritism can emerge as an optimal outcome when return of the firm is low.
    Keywords: Favouritism, status-incentives, non-verifiability, moral hazard, optimal contract
    JEL: D86 L14 L20
    Date: 2013–06–01
  7. By: Sequeira, Tiago; Santos, Marcelo; Ferreira-Lopes, Alexandra
    Abstract: The determinants of human capital have been studied sparsely in the literature. Although there is a huge literature on the determinants of schooling linked with the quality of schooling, there are not many contributions that explore the deep determinants of investment in, quantity and quality of human capital. This paper investigates the relationship between human capital and the ancestral genetic diversity of populations. It highlights a strong hump-shaped relationship between genetic diversity and human capital. This means that some of the human capital achievements nowadays may root to the genetic diversity mostly determined many centuries ago. Results are robust to the introduction of several controls, to a consideration of a proxy for human capital in 1500 and to IV estimation.
    Keywords: human capital; genetic diversity; determinants of development; determinants of human capital.
    JEL: I25 N10 N30 O10 O50 Z10
    Date: 2013–08–19
  8. By: Julie Beugnot; Bernard Fortin; Guy Lacroix; Marie Claire Villeval
    Abstract: This paper extends the standard work effort model by allowing workers to interact through networks. We investigate experimentally whether peer performances and peer contextual effects influence individual performances. Two types of network are considered. Participants in Recursive networks are paired with participants who played previously in isolation. In Simultaneous networks, participants interact in real-time along an undirected line. Mean peer effects are identified in both cases. Individual performances increase with peer performances in the recursive network. In the simultaneous network, endogenous peer effects vary according to gender: they are large for men but not statistically different from zero for women.
    Keywords: Peer effects, social networks, Work effort, piece rate, experiment
    JEL: C91 J16 J24 J31 M52
    Date: 2013
  9. By: John M. Barrios (The University of Miami); Marco Fasan (Dept. of Management, Università Ca' Foscari Venice); Daniele Macciocchi (LUISS Guido Carli University)
    Abstract: The aim of this paper is to provide a theoretical framework in order to study the relationship between earnings management and CEO turnover in Italy. The issue is relevant because it has never been tackled in the Italian context, which presents some important peculiarities when compared to other, most widely studied, corporate governance systems. We find that, according to previous literature and despite the relevant differences existing between market oriented and control-oriented systems, there should be a positive relationship between the level of earnings management and the likelihood for CEOs to be turnovered. Relying on the literature on value relevance, we also analyze the relation between CEO turnover and value relevance of earnings, which in this context is seen as a consequence of the turnover. We propose that the market may reward the company for its decision of contrasting earnings management by firing the CEO through increasing the ÒweightÓ attributed to its accounting numbers.
    Keywords: CEO turnover, earnings management, Italy
    JEL: M40 M41
    Date: 2013–08
  10. By: Lisa Barrow; Cecilia Elena Rouse
    Abstract: Using survey data from a field experiment in the U.S., we test whether and how financial incentives change student behavior. We find that providing post-secondary scholarships with incentives to meet performance, enrollment, and/or attendance benchmarks induced students to devote more time to educational activities and to increase the quality of effort toward, and engagement with, their studies; students also allocated less time to other activities such as work and leisure. While the incentives did not generate impacts after eligibility had ended, they also did not decrease students’ inherent interest or enjoyment in learning. Finally, we present evidence suggesting that students were motivated more by the incentives provided than simply the effect of giving additional money, and that students who were arguably less time-constrained were more responsive to the incentives as were those who were plausibly more myopic. Overall these results indicate that well-designed incentives can induce post-secondary students to increase investments in educational attainment.
    Keywords: Education, Higher - Economic aspects
    Date: 2013
  11. By: Lara LEBEDINSKI (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Vincent VANDENBERGHE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: There is plenty of individual-level evidence, based on the estimation of Mincerian equations, showing that better-educated individuals earn more. This is usually interpreted as a proof that education raises labour productivity. Some macroeconomists, analysing cross-country time series, also support the idea that the continuous expansion of education has contributed positively to growth. Surprisingly, most economists with an interest in human capital have neglected the level of the firm to study the education-productivity-wage nexus. And the few published works considering firm-level evidence are lacking a proper strategy to cope with the endogeneity problem inherent to the estimation of production and wage functions. This paper taps into a rich, firm-level, Belgian panel database that contains information on productivity, labour cost and the workforce’s educational attainment. It aims at providing estimates of the causal effect of education on productivity and wage/labour costs. Therefore, it exclusively resorts to within firm changes to deal with time-invariant heterogeneity bias. What is more, it addresses the risk of simultaneity bias (endogeneity of firms’ education-mix choices in the short run) using the structural approach suggested by Ackerberg, Caves & Frazer (2006), alongside more traditional system-generalized method of moments (GMM) methods (Blundell & Bond, 1998) where lagged values of labour inputs are used as instruments. Results suggest that human capital, in particular larger shares of university-educated workers inside firms, translate into significantly higher firm-level labour productivity, and that labour costs are relatively well aligned on education-driven labour productivity differences. In other words, we find evidence that the Mincerian relationship between education and individual wages is driven by a strong positive link between education and firm-level productivity.
    Keywords: Education, Human capital, Firm-Level Productivity and Labour Cost, Cobb-Douglas, CES, imperfect substitutability
    JEL: J24 E24 C51
    Date: 2013–08–26
  12. By: Moshe Justman (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Department of Economics, Ben Gurion University); Karine van der Beek (Department of Economics, Ben Gurion University)
    Abstract: We draw on quantitative and descriptive data from Robert Campbell’s widely cited manual for prospective apprentices, The London Tradesman (1747), to demonstrate the responsiveness of apprenticeship in mid-eighteenth century London to market forces of supply and demand. We regress apprenticeship premiums on journeymen’s wages, set-up costs, and a selection of employment conditions and requirements across 178 trades, and find a significant elasticity of 0.4 with respect to wages and 0.25 with respect to set-up costs. We interpret this as supporting an economic model that views premiums as bounded from above by the expected benefits of acquiring the skills of the trade (Lane, 1996); bounded from below by the expected net training costs to the master, taking into account the possibility of the apprentice terminating his service prematurely (Wallis, 2008); and reflecting the relative bargaining power of master and parent. This supports the thesis that apprenticeship played an important role in adapting the English workforce to the skill requirements of the Industrial Revolution. Moreover, by demonstrating the internal and external consistency of Campbell’s observations, our findings support their further use as a unique, invaluable source of detailed, trade-specific wage data from the early years of the Industrial Revolution.
    Keywords: Apprenticeship, Industrial Revolution, tradesmen’s wages, London, eighteenth century, Robert Campbell
    JEL: N33
    Date: 2013–08
  13. By: Doyle, Orla (University College Dublin); Harmon, Colm P. (University of Sydney); Heckman, James J. (University of Chicago); Logue, Caitriona (University College Dublin); Moon, Seong Hyeok (University of Chicago)
    Abstract: The literature on skill formation and human capital development clearly demonstrates that early investment in children is an equitable and efficient policy with large returns in adulthood. Yet little is known about the mechanisms involved in producing these long-term effects. This paper presents early evidence on the nature of skill formation based on an experimentally designed, five-year home visiting program in Ireland targeting disadvantaged families - Preparing for Life (PFL). We examine the impact of investment between utero to 18 months of age on a range of parental and child outcomes. Using the methodology of Heckman et al. (2010a), permutation testing methods and a stepdown procedure are applied to account for the small sample size and the increased likelihood of false discoveries when examining multiple outcomes. The results show that the program impact is concentrated on parental behaviors and the home environment, with little impact on child development at this early stage. This indicates that home visiting programs can be effective at offsetting deficits in parenting skills within a relatively short timeframe, yet continued investment may be required to observe direct effects on child development. While correcting for attrition bias leads to some changes in the precision of estimates, overall the results are quite similar.
    Keywords: early childhood intervention, human capital development, randomized control trial, multiple hypotheses, permutation testing
    JEL: C12 C93 J13 J24
    Date: 2013–08
  14. By: Hammer, Jeffrey; Spears, Dean
    Abstract: Open defecation is exceptionally widespread in India, a county with puzzlingly high rates of child stunting. This paper reports a randomized controlled trial of a village-level sanitation program, implemented in one district by the government of Maharashtra. The program caused a large but plausible average increase in child height (95 percent confidence interval [0.04 to 0.61] standard deviations), which is an important marker of human capital. The results demonstrate sanitation externalities: an effect even on children in households that did not adopt latrines. Unusually, surveyors also collected data in districts where the government planned but ultimately did not conduct an experiment, permitting analysis of the importance of the set eligible for randomization.
    Keywords: Health Monitoring&Evaluation,Disease Control&Prevention,Population Policies,Hygiene Promotion and Social Marketing,Early Child and Children's Health
    Date: 2013–08–01
  15. By: Nathalie Greenan (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé, TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV)); Ekaterina Kalugina (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé, TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), EPEE - Centre d'Etudes des Politiques Economiques - Université d'Evry-Val d'Essonne); Emmanuelle Walkowiak (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé, TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris-Est Créteil Val-de-Marne (UPEC) : EA437 - Université Paris-Est Marne-la-Vallée (UPEMLV))
    Abstract: This paper provides a mapping of quality of work and measures its evolution between 1995 and 2005 by using European Working Conditions Surveys. With a multilevel modelling, we assess the sensitivity of observed trends to "composition effects" and "country effects". Results suggest a decreasing trend in the quality of work: working conditions have deteriorated, while work has become more intense and less complex. In Germany and Italy all indicators have worsened while other European countries have more mixed results.
    Keywords: quality of work, quality of working life, working conditions, work intensity, work complexity, European comparison, multilevel modelling
    Date: 2013

This nep-hrm issue is ©2013 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.