nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2013‒11‒16
fifteen papers chosen by
Tommaso Reggiani
University of Cologne

  1. Using a natural field experiment to test the theory of multitasking By Fuhai Hong; Tanjim Hossain; John List; Migiwa Tanaka
  2. Good news and bad news in subjective performance evaluation By Budde, Jörg
  3. Post schooling human capital investments and the life cycle variance of earnings By Thierry Magnac; Sebastien Roux; Nicolas Pistolesi
  4. Managers’ mobility, trade performance, and wages By Mion, Giordano; Opromolla, Luca David
  5. Age Biased Technical and Organisational Change, Training and Employment Prospects of Older Workers By Roger, Muriel; Caroli, Eve; Behaghel, Luc
  6. Incentives and teacher effort: further evidence from a developing country By Dang, Hai-Anh H.; King, Elizabeth M.
  7. Does the Unemployement Benefit Institution Affect the Productivity of Workers? Evidence from a Field Experiment By Blanco, M.; Dalton, P.S.; Vargas, J.F.
  8. Working in family firms : less paid but more secure ? Evidence from French matched employer-employee data By Rebérioux, Antoine; Caroli, Eve; Breda, Thomas; Bassanini, Andrea
  9. Education, experience and dynamic urban wage premium By Fredrik Carlsen; Jorn Rattso; Hildegunn E. Stokke
  10. An Empirical Analysis of the Relationship Between Individual Characteristics and Research Productivity: Relationship Between Experience as Practical Physician and Productivity By Naomi Fukuzawa
  11. Do middle managers matter? By Elena Feltrinelli; Roberto Gabriele; Sandro Trento
  12. Education and career path of French nursing home managers : impact on their human resources practices By Joël, Marie-Eve; Sibille, Romain
  13. Absence from work of the self-employed: A comparison with paid employees By Lechmann, Daniel S. J.; Schnabel, Claus
  14. Does Home Ownership Crowd Out Investment in Children's Human Capital? By FORNERO Elsa; ROMITI Agnese; ROSSI Cristina
  15. Schooling Supply and the Structure of Production: Evidence from US States 1950–1990 By Ciccone, Antonio; Peri, Giovanni

  1. By: Fuhai Hong; Tanjim Hossain; John List; Migiwa Tanaka
    Abstract: A well-recognized problem in the multitasking literature is that workers might substantially reduce their effort on tasks that produce unobservable outputs as they seek the salient rewards to observable outputs. Since the theory related to multitasking is decades ahead of the empirical evidence, the economic costs of standard incentive schemes under multitasking contexts remain largely unknown. This study provides empirical insights quantifying such effects using a field experiment in Chinese factories. Using more than 2200 data points across 126 workers, we find sharp evidence that workers do trade off the incented output (quantity) at the expense of the non-incented one (quality) as a result of a piece rate bonus scheme. Consistent with our theoretical model, treatment effects are much stronger for workers whose base salary structure is a flat wage compared to those under a piece rate base salary. While the incentives result in a large increase in quantity and a sharp decrease in quality for workers under a flat base salary, they result only in a small increase in quantity without affecting quality for workers under a piece rate base salary.
    Date: 2013
  2. By: Budde, Jörg
    Abstract: Earlier studies show that contracts under subjective performance evaluation are dichotomous and punish only worst performance. I show that with limited liability payments need not be binary. More importantly, if the agent earns a rent from limited liability, the optimal contract distinguishes only signals of good news and bad news of the agent’s action.
    Keywords: bonus; monotone likelihood ratio; wage compression
    JEL: D82 M52 M54
    Date: 2013–09
  3. By: Thierry Magnac (Toulouse School of Economics); Sebastien Roux (CREST); Nicolas Pistolesi (Toulouse School of Economics (GREMAQ))
    Abstract: We propose an original model of human capital investments after leaving school in which individuals differ in their initial human capital obtained at school, their rate of return, their costs of human capital investments and their terminal values of human capital at retirement. We derive a tractable reduced form Mincerian model of log earnings profiles along the life cycle which is written as a linear factor model in which levels, growth and curvature of earnings profiles are individual-specific. Using panel data from a single cohort of French male wage earners observed over a long span of 30 years, a random effect model is estimated first by pseudo maximum likelihood methods. This step is followed by a simple second step fixed effect method by which individual-specific structural parameters are estimated. This allows us to test restrictions, compute counterfactual profiles and evaluate how earnings inequality over the life-cycle is affected by changes in structural parameters. Under some conditions, even small changes in life expectancy seem to imply large changes in earnings inequality.
    Date: 2013
  4. By: Mion, Giordano; Opromolla, Luca David
    Abstract: Knowledge is key to the success of a firm. Firms and their managers acquire knowledge via channels which are often difficult to track down and quantify. By matching employer-employee data with trade data at the firm level we show that the export experience acquired by managers in previous firms leads their current firm towards higher export performance, and commands a sizeable wage premium for the manager. Export knowledge is decisive when it is market-specific: managers with experience related to markets served by their current firm receive an even higher wage premium; firms are more likely to enter markets where their managers have experience; exporters are more likely to stay in those markets, and their sales are on average higher. Our findings are robust to controlling for endogeneity. The impact of managers’ export experience on a firm’s export performance is at least as strong as that of firm productivity. JEL Classification: M2, L2, F16, J31, J62
    Keywords: export experience, firm trade performance, job mobility, managers, wage premium
    Date: 2013–10
  5. By: Roger, Muriel; Caroli, Eve; Behaghel, Luc
    Abstract: We analyse the role of training in mitigating the negative impact of technical and organizational changes on the employment prospects of older workers. Using a panel of French firms in the late 1990s, we first estimate wage bill share equations for different age groups. Consistently with what is found in the literature, we find that adopting new technologies and innovative work practices negatively affects the wage bill share of older workers. In contrast, training older workers more than average increases their share in the wage bill in the next period. So, training contributes to offset the negative impact of ICT and innovative work practices. However, it does not reduce the age bias associated with these innovative devices : the interaction terms between training and ICT/innovative work practices are either insignificant or negative. As a second step, we estimate the impact of ICT, innovative work practices and training on employment flows by age group in the next period. We get similar results to those obtained with wage bill shares. Overall, training appears to have a positive impact on the employability of older workers, but it offers limited prospects to dampen the age bias associated with new technologies and innovative work practices.
    Keywords: Technical change; organizational change; training; older workers;
    JEL: J14 J24 J26 O30
    Date: 2013
  6. By: Dang, Hai-Anh H.; King, Elizabeth M.
    Abstract: Few would contest that teachers are a very important determinant of whether students learn in school. Yet, in the face of compelling evidence that many students are not learning what they are expected to learn, how to improve teacher performance has been the focus of much policy debate in rich and poor countries. This paper examines how incentives, both pecuniary and non-pecuniary, influence teacher effort. Using school survey data from Lao PDR, it estimates new measures of teacher effort, including the number of hours that teachers spend preparing for classes and teacher provision of private tutoring classes outside class hours. The estimation results indicate that teachers increase effort in response to non-pecuniary incentives, such as greater teacher autonomy over teaching materials, and monitoring mechanism, such as the existence of an active parent-teacher association and the ability of school principals to dismiss teachers. Methodologically, the paper provides a detailed derivation of a simultaneous ordinary least squares-probit model with school random effects that can jointly estimate teacher work hours and tutoring provision.
    Keywords: Tertiary Education,Education For All,Teaching and Learning,Primary Education,Secondary Education
    Date: 2013–11–01
  7. By: Blanco, M.; Dalton, P.S.; Vargas, J.F. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: We investigate whether and how the type of unemployment bene t institution affects productivity. We designed a field experiment to compare workers' productivity under a welfare system, where the unemployed receive an unconditional monetary transfer, with their productivity under a workfare system, where the transfer is received conditional on the unemployed spending some time on ancillary activities. First, we fi nd that having an unemployment bene fit institution, regardless of whether it makes transfers conditional or unconditional, increases workers' productivity. Second, we find that productivity is higher under Welfare than under Workfare. Becoming unemployed under Welfare comes at the psychological cost of a drop in self-esteem, presumably due to the shame or stigma associated with receiving an unconditional unemployment benefi t. We document the empirical relevance of precisely this channel. The differences we observe in productivity suggest that this psychological cost acts as an extra non- monetary incentive for workers under Welfare to put a higher effort in their work.
    Keywords: Unemployment Benefi ts;Workfare;Productivity;Self-esteem;Shame
    JEL: J24 J65 J45
    Date: 2013
  8. By: Rebérioux, Antoine; Caroli, Eve; Breda, Thomas; Bassanini, Andrea
    Abstract: We study the compensation package offered by family firms. Using matched employer-employee data for a sample of French establishments in the 2000s, we first show that family firms pay on average lower wages to their workers. This family/non-family wage gap is robust to controlling for several establishment and individual characteristics and does not appear to be due either to the differential of productivity between family and non-family firms or to unobserved establishment and individual heterogeneity. Moreover, it is relatively homogeneous across workers with different gender, educational attainment and age. By contrast, the family/non-family wage gap is found to be larger for clerks and blue-collar workers than for managers, supervisors and technicians, for whom we find no significant wage gap. As a second step, we investigate why workers stay in family firms while being paid less. We show that these firms offer greater job security. We find evidence that the rate of dismissal is lower in family than in non-family firms. We also show that family firms rely less on dismissals and more on hiring reductions when they downsize. These results are confirmed by subjective data : the perceived risk of dismissal is significantly lower in family firms than in non-family ones. We speculate that our results can be explained either by a compensating wage differential story or by a model in which workers sort in different firms according to their preferences.
    Keywords: Family firms; wages; job security; linked employer-employee data;
    JEL: G34 J31 J33 J63 L26
    Date: 2013–04
  9. By: Fredrik Carlsen (Department of Economics, Norwegian University of Science and Technology); Jorn Rattso (Department of Economics, Norwegian University of Science and Technology); Hildegunn E. Stokke (Department of Economics, Norwegian University of Science and Technology)
    Abstract: We analyze static and dynamic agglomeration effects across education groups. The data are based on administrative registers covering all full time workers in the private sector of Norway during 2001-2010, about 6.5 million worker-year observations, including place and sector of work experience since 1993. Accounting for unobservable abilities with identification based on movers, the static urban wage premium is similar across education groups. When the history of work experience in different regions and sectors is included, we show that the dynamic wage premium increases in education level and that highly educated in high wage sectors have the largest learning advantage.
    Keywords: Agglomeration economies, sorting, education, worker experience
    JEL: J24 J31 J61 R12 R23
    Date: 2013–11–05
  10. By: Naomi Fukuzawa
    Abstract: This paper provides an analysis of the relationship between research performance and individual characteristics (e.g., career path information) of researchers, based on information provided in the Curriculum Vitaes (CVs) of 565 excellent researchers within the life sciences and medical sciences fields in Japan. I specifically analyzed the relationship between the experiences of practical physicians and research performance. As a result, I found that the experience as a practical physician had a statistically positive relationship with the number of research papers, but there was not a significant relationship with the number of citations. Moreover, the diversity of a researcher’s career related significantly to the number of citations and patents. An employment experience at a young age with a company or independent administrative agency had a significant and positive relationship with number of coauthors. However, a significant relationship between work experience in a foreign country and research performance was not observed.
    Keywords: Research productivity, Curriculum Vitae, Career path, Practical physician, Diversity of career, Research grant
  11. By: Elena Feltrinelli; Roberto Gabriele; Sandro Trento
    Abstract: Middle Managers (MM) are key figures for firm ability to gain and sustaining competitive advantage (CIT). Their training activity can be seen as an important tool for improving and upgrading managerial practices to sustain firm strategy that is strictly related with its competitive advantage. The present research aims at deepening the analysis undertaken within the literature branch concerned with the effects of training of middle managers on direct measures of firm performance as measured by profitability indices and productivity. In particular, the study focuses on middle management continuing vocational training in the Italian manufacturing sector in the time window 2006-2011. The study is based on a novel database containing balance sheet data together with exhaustive information about the training undertaken by managers working in the sample of companies available Ð provided by Fondirigenti. The study extends and deepens the existing literature based on two key aspects: (a) the possibility to disaggregate the training activity along two dimensions: the methodology used and the field in which the training is done; (b) the opportunity to use different more precise measures of training, namely the cost in euros and the time devoted to the activity. We empirically test, using regression models based on GMM estimation, a set of research hypotheses and we find support for the five following hypotheses: (H1) Middle management continuing vocational training has an effect on performance indicators namely ROI, ROE and TFP, Moreover the first two show a TMGT effect; MM training is more effective for: larger firms, older firms (H2 and H3); external resources are important in making MM training effective (H3); different methodologies of training have heterogeneous effects on performance: experiential methods are more effective than relational and front lesson methods (H5). We discuss the results and derive some policy conclusions
    Keywords: Managerial Training, firm performance, IV-GMM, TMGT
    Date: 2013
  12. By: Joël, Marie-Eve; Sibille, Romain
    Abstract: In France, more than 75% of the establishments spec ialized in the care for dependant elderly people are EHPADs (Establishments with housing for dependa nt and elderly people). These structures were created with the aim to rationalize the offer in this sector, but remain economically inefficient. Besides the fact that private and for-profit EHPADs would be more efficient, the studies devoted to the efficiency of these nursing homes do not allow to comprehend the actual causes explaining this situation. Throughout this article, we attempt to open the EHPAD’s black box in order to identify the differences in the production’s organization from which the inefficiencies could originate. We hypothesize that EHPAD managers have different pref erences, correlated with their professional characteristics, which would explain their managing strategies, especially concerning human resources. The results of an original survey among a sample of EHPAD managers focused on management practice matched to the EHPA2011 survey were mobilized in the testing of this relation. It first appears that the directors adopt different strategies to optimize the management of their hum an resources. Three decisive points concerning the pol icy for optimizing personnel management were studied: organizing the nurses’ timetables in ten-hour days versus maintaining a traditional organization in 7-hour days, introducing a regular attendance bonus versus not integrating this bonus in the form of remuneration, proposing diploma courses versus only offering short training courses. Probit models were used to explain the existence of different behaviors. In all three cases, the choices are determined by the managers’ professional characteristics, notably their training. These results open up new perspectives for public authorities to improve the efficiency of EHPADs and the quality of the service they have to offer.
    Keywords: Changement organisationnel; Planification; Ressources humaines; Personnel; Direction; Chefs d'entreprise; EHPAD; Établissements d'hébergement pour personnes âgées dépendantes;
    JEL: I11 I12 M12 M54
    Date: 2013–09
  13. By: Lechmann, Daniel S. J.; Schnabel, Claus
    Abstract: Utilising a large representative data set for Germany, this study contrasts absenteeism of self-employed individuals and paid employees. We find that absence from work is clearly less prevalent among the self-employed than among paid employees. Only to a small extent, this difference can be traced back to differences in health status and job satisfaction. Furthermore, the gap in absenteeism is apparently not driven by different behaviour in case of sickness as we find no difference in the prevalence of presenteeism between the two groups. We suspect that different behaviour in case of healthiness plays a role, highlighting potential shirking and moral hazard problems in paid employment. -- Unter Verwendung eines großen repräsentativen Datensatzes für Deutschland stellt diese Studie Fehlzeiten von Selbständigen und abhängig Beschäftigten gegenüber. Dabei zeigt sich, dass es bei Selbständigen weit weniger verbreitet ist, dem Arbeitsplatz fernzubleiben, als bei abhängig Beschäftigten. Dieser Unterschied kann nur zu einem kleinen Teil auf Unterschiede im Gesundheitszustand und der Arbeitsplatzzufriedenheit zurückgeführt werden. Anscheinend ist der Unterschied bei den Fehlzeiten auch nicht durch unterschiedliches Verhalten im Krankheitsfall zu erklären, da wir keine Unterschiede zwischen beiden Gruppen hinsichtlich Präsentismus feststellen. Wir vermuten, dass unterschiedliches Verhalten bei Gesundheit eine Rolle spielt, was auf mögliche Probleme von Moral Hazard und gezieltem Fernbleiben in abhängiger Beschäftigung hindeutet.
    Keywords: absenteeism,Germany,self-employed,sick leave
    JEL: I19 J22 J23
    Date: 2013
  14. By: FORNERO Elsa; ROMITI Agnese; ROSSI Cristina
    Abstract: Parents can adopt two strategies to take care about their children and their future life: they can invest in their human capital, or in real (and financial) wealth to bequeath to them. The optimal children?s endowment is assured in equilibrium by complete and perfect markets. However, in the real world markets are far from being perfect and the investment in real or financial wealth can ultimately displace the human capital?s one. A strong preference for home ownership makes parents inclined to consider the house as the typical bequest-friendly asset, even at the expense of children?s education. Misconceptions about the relative returns of the two different forms of wealth, with a perceived excessive premium from the returns from housing wealth, may also be at work. We argue that this scenario could be well represented by the Italian context. Therefore we analyze the possible trade off between (children?s) human and (inherited) real capital by using the Bank of Italy?s Survey of Household Income and Wealth (SHIW). Our evidence seems to confirm our hypothesis, and in particular the results are higher for the women?s sample.
    Keywords: Education; Bequests; parental investment
    JEL: D10 D91 I21
    Date: 2013–11
  15. By: Ciccone, Antonio (Universitat Pompeu Fabra); Peri, Giovanni (University of California)
    Abstract: We find that over the period 1950–1990, states in United States absorbed increases in the supply of schooling due to tighter compulsory schooling and child labor laws mostly through within-industry increases in the schooling intensity of production. Shifts in the industry composition towards more schooling-intensive industries played a less important role. To try and understand this finding theoretically, we consider a free trade model with two goods/industries, two skill types, and many regions that produce a fixed range of differentiated varieties of the same goods. We find that a calibrated version of the model can account for shifts in schooling supply being mostly absorbed through within-industry increases in the schooling intensity of production even if the elasticity of substitution between varieties is substantially higher than estimates in the literature.
    Keywords: human capital; skills; schooling; labor demand; United States
    JEL: E24 I20 J23 J24
    Date: 2013–09–13

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.