nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2013‒09‒13
ten papers chosen by
Tommaso Reggiani
University of Cologne

  1. Coordination in Teams : A Real Effort-task Experiment with Informal Punishment By Radu Vranceanu; Fouad El Ouardighi; Delphine Dubart
  2. Career progression, economic downturns, and skills By Jerome Adda; Christian Dustmann; Costas Meghir; Jean-Marc Robin
  3. Corporate social responsibility, multi-faceted job-products, and employee outcomes By Shuili Du; CB Bhattacharya; Sankar Sen
  4. The (ir)resistible rise of agency rents By Biais, Bruno; Landier, Augustin
  5. Physical Activity and Thinking: An Investigation of their Relationship By Todd McElroy; David L. Dickinson; Nathan Stroh; Christopher A. Dickinson
  6. Elected vs appointed public law enforcers By Eric Langlais; Marie Obidzinski
  7. Developing an evidence-based management approach for creating high performing higher education institutions By André de Waal; Leo Kerklaan
  8. People Skills and the Labor-Market Outcomes of Underrepresented Groups By Bas ter Weel; Lex Borghans; Bruce A. Weinberg
  9. Preferences and biases in educational choices and labor market expectations: shrinking the black box of gender By Ernesto Reuben; Matthew Wiswall; Basit Zafar
  10. Long-term Persistence By Luigi Guiso; Paola Sapienza; Luigi Zingales

  1. By: Radu Vranceanu (Economics Department - ESSEC Business School); Fouad El Ouardighi (Operation management Department - ESSEC Business School); Delphine Dubart (ESSEC Business School - ESSEC Business School)
    Abstract: This paper reports the results from a real-effort team production experiment, where best performers can impose either tacit or explicit sanctions on their less-performing partners. The behavior of the best performer in the team differs from one condition to another. When explicit sanctions are not allowed, good performers reduce their effort in response to the advantageous difference in scores; when they can impose sanctions, their change in effort is no longer related to the difference in scores. To some extent, a mechanism of explicit sanctions allows good performers to focus on their own performance. Not sanctioning an opponent who under-performs, what we refer to as forgiveness, prompts the latter to improve his performance, but applying the sanction has a stronger effect.
    Keywords: Team work; performance; experimental economics; punishment
    Date: 2013
  2. By: Jerome Adda (Institute for Fiscal Studies and European University Institute); Christian Dustmann (Institute for Fiscal Studies and University College London); Costas Meghir (Institute for Fiscal Studies and Yale University); Jean-Marc Robin (Institute for Fiscal Studies and Sciences Po)
    Abstract: This paper analyses the career progression of skilled and unskilled workers with a focus on how careers are affected by economic downturns and whether formal skills, acquired early on, can shield workers from the effect of recessions. Using detailed administrative data for Germany for numerous birth cohorts across different regions, we follow workers from labour market entry onwards and estimate a dynamic life-cycle model of vocational training choice, labour supply, and wage progression. Most particularly, our model allows for labour market frictions that vary by skill group and over the business cycle. We find that sources of wage growth differ: learning-by-doing is an important component for unskilled workers early on in their careers, while job mobility is important for workers who acquire skills in an apprenticeship scheme before labour market entry. Likewise, economic downturns affect skill groups through very different channels: unskilled workers lose out from a decline in productivity and human capital, whereas skilled individuals suffer mainly from lack of mobility.
    Keywords: wage determination, skills, business cycles, apprenticeship training, job mobility
    Date: 2013–08
  3. By: Shuili Du (University of New Hampshire); CB Bhattacharya (ESMT European School of Management and Technology); Sankar Sen (Baruch College)
    Abstract: This paper examines how employees react to their organizations’ corporate socialresponsibility (CSR). Drawing upon research in internal marketing and psychologicalcontract theory, we conceptualize that employees have multi-faceted job needs(i.e., economic, developmental, and ideological needs) and that CSR programsconstitute an important means to fulfill these needs. Based on cluster analysis, weidentify three employee segments, Idealists, Enthusiasts, and Indifferents, whovary in their multi-faceted job needs and, consequently, their demand fororganizational CSR. We further find that an organization’s CSR programs generatesfavorable employee related outcomes, such as job satisfaction and reduction inturnover intention, partially by fulfilling employees’ ideological and developmentaljob needs. Finally, we find that CSR proximity strengthens the positive impact ofCSR on employee-related outcomes. This research reveals significant employeeheterogeneity in their demand for organizational CSR and sheds light on theunderlying mechanisms linking CSR to employee-related outcomes. We end with adiscussion about the theoretical and practical implications of our research.
    Keywords: Corporate social responsibility, job product, employee job performance, cluster analysis
    Date: 2013–08–27
  4. By: Biais, Bruno; Landier, Augustin
    Abstract: The rents agents can extract from principals increase with the magnitude of incentive problems, which the literature usually takes as given. We endogenize it, by allowing agents to choose technologies that are more or less opaque and correspondingly prone to agency problems. In our overlapping generations model, agents compete with their predecessors. We study whether the presence of old- timers earning low rents can keep young managersrent-seeking in check. With dynamic contracts, long horizons help principals incentivize agents. Hence, old agents are imperfect substitutes for young ones. This mutes down competition between generations, especially if compensation deferral is strong. As a result, young managers can opt for more opaque and complex technologies, and therefore larger rents, than their predecessors. Thus, in equilibrium, complexity and rents rise over time.
    Keywords: Agency rents, moral hazard, …nance sector, dynamic contracts, opacity.
    JEL: D3 D8 G2
    Date: 2013–05
  5. By: Todd McElroy; David L. Dickinson; Nathan Stroh; Christopher A. Dickinson
    Abstract: Physical activity level is becoming more recognized as a primary factor in overall human health and obesity. Humans possess a number of traits that influence their physical activity level. We examined whether having a high or low desire to engage in challenging mental activity predicted differences in daily physical activity levels. We recruited 30 high “need for cognition” (NFC) individuals and 30 low-NFC individuals and measured their physical activity level in 30-second epochs over a 1-week period. Low-NFC individuals were more physically active overall but this difference was most pronounced during the 5-day work week and lessened during the weekend. Awareness of this physical activity deficit and its negative consequences may encourage high-NFC individuals to be proactive and adopt lifestyle changes to increase their physical activity levels. Key Words: Daily activity, Cognition, Obesity, Risk
    Date: 2013
  6. By: Eric Langlais (EconomiX, UMR CNRS 7235 and University of Paris Ouest-Nanterre-La Défense); Marie Obidzinski (CRESE, Université de Franche-Comté)
    Abstract: This paper revisits the issue of law enforcement and the design of monetary sanctions when the public law enforcer's incentives depart from those of a benevolent authority, which is the most frequent assumption made in the literature on crime deterrence. We first consider the case an elected enforcer. We find that when the harm generated by offenses is quite small relative to the average private benefits, equilibrium with weak enforcement/low sanction prevails. Instead, when the harm generated by offenses is high relative to the average private benefits, it is the equilibrium with strong enforcement/high sanctions that prevails. Therefore, we provide an explanation for the empirical puzzle highlighted by Lin(2007): elected enforcers punish major (minor) crimes more (less) severely than the benevolent social planer. The case of an appointed enforcer prone to rent seeking is also considered. The monetary sanction under rent seeking is closer to the utilitarian level, as compared with the one under election.
    Keywords: law enforcement, deterrence, monetary sanctions, punishment, electoral competition, democracy, rent seeking, dictature.
    JEL: D72 D73 H1 K14 K23 K4
    Date: 2013–09
  7. By: André de Waal (HPO Center, Hilversum, The Netherlands, Maastricht School of Management, Maastricht, The Netherlands); Leo Kerklaan (Franeker Management Academie, Franeker, The Netherlands)
    Abstract: Effective higher education institutions (HEIs) are seen as an important building block in the development of a country. Unfortunately HEIs have come under increased pressure because of the worldwide trend of massification of higher education when at the same time students look for better quality education, while concurrently educational budgets are under pressure because of the economic crisis. This puts a great strain on HEIs who are forced to do more, of higher quality, in different ways, and with less resources. HEIs who manage to thrive in these challenging circumstances, by paying equal attention to increasing quality of both teaching and the internal organization, are known as high performing HEIs (HPHEIs). In this article an evidence-based management approach is applied for creating HPHEIs. Thus HEIs can, based on facts, make well-founded decisions in regard to the way forward when transforming themselves into HPHEIS.
    Date: 2013–09
  8. By: Bas ter Weel; Lex Borghans; Bruce A. Weinberg
    Abstract: This paper shows that people skills are important determinants of labor-market outcomes, including occupational choice and wages. Technological and organizational changes have increased the importance of people skills in the workplace. We particularly focus on how the increased importance of people skills has affected the labor-market outcomes of underrepresented groups assuming gender differences in interactions and that cultural differences (including prejudice) may impede cross-racial and ethnic interactions. Our estimates for Britain, Germany and the United States are consistent with such an explanation. Acceleration in the rate of increase in the importance of people skills between the late 1970s and early 1990s in the US can help explain why the gender-wage gap closed and the black-white wage gap stagnated in these years relative to the preceding and following years.
    JEL: J16 J21 J24 J31
    Date: 2013–09
  9. By: Ernesto Reuben; Matthew Wiswall; Basit Zafar
    Abstract: Standard observed characteristics explain only part of the differences between men and women in education choices and labor market trajectories. Using an experiment to derive students' levels of overconfidence, and preferences for competitiveness and risk, this paper investigates whether these behavioral biases and preferences explain gender differences in college major choices and expected future earnings. In a sample of high-ability undergraduates, we find that competitiveness and overconfidence, but not risk aversion, are systematically related with expectations about future earnings: Individuals who are overconfident and overly competitive have significantly higher earnings expectations. Moreover, gender differences in overconfidence and competitiveness explain about 18 percent of the gender gap in earnings expectations. These experimental measures explain as much of the gender gap in earnings expectations as a rich set of control variables, including test scores and family background, and they are poorly proxied by these same control variables, underscoring that they represent independent variation. While expected earnings are related to college major choices, the experimental measures are not related with college major choice.
    Keywords: Career development - Sex differences ; Women - Education ; Universities and colleges ; Risk-taking (Psychology) ; Prediction (Psychology) ; Competition
    Date: 2013
  10. By: Luigi Guiso (EIEF and CEPR); Paola Sapienza (Northwestern University, NBER and CEPR); Luigi Zingales (University of Chicago, NBER and CEPR)
    Abstract: We study whether culture has an independent role in creating persistence of institutional shocks by testing whether today’s notable differences in civic capital between the North and the South of Italy are the legacy of the medieval free city-state experience of the Middle Ages. We show that cities that experienced self-government in the Middle Ages have more civic capital today. This effect is observable even within the North and persists even accounting for the fact that cities did not become independent randomly. We conjecture that this effect persisted over time through the intergenerational transmission of attributional styles (i.e., the way people explain the events they experience to themselves). Consistently, we find that fifth-graders in former city-states exhibit a less pessimistic attributional style, which itself is correlated with a higher level of civic capital.
    Date: 2013

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