nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒03‒22
nine papers chosen by
Tommaso Reggiani
University of Cologne

  1. Works Councils, Training Activities and Innovation: A Study of German Firms By Uwe Cantner; Wolfgang Gerstlberger; Ipsita Roy
  2. Hiring and Escalation Bias in Subjective Performance Evaluations: A Laboratory Experiment By Andrej Angelovski; Jordi Brandts; Carles Sola
  3. Legitimacy, Communication and Leadership in the Turnaround Game By Jordi Brandts; David J. Cooper; Roberto A. Weber
  4. Gender and the Labor Market: What Have We Learned from Filed and Lab Experiments? By Ghazala Azmat; Barbara Petrongolo
  5. The role of market access and human capital in regional wage disparities: Empirical evidence for Ecuador By Rafael Alvarado; Miguel Atienza
  6. To Bond or to Bridge? Contingent Effects of Managers' Social Capital on Organizational Performance By Sangyub Ryu
  7. Endogenous fertility with a sibship size effect. By Elise S. Brezis; Rodolphe Dos Santos Ferreira
  8. Does Human Capital Risk Explain The Value Premium Puzzle? By Sylvain, Serginio
  9. Procrastination, Academic Success and the Effectiveness of a Remedial Program By De Paola, Maria; Scoppa, Vincenzo

  1. By: Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Wolfgang Gerstlberger (University of Southern Denmark, Department of Marketing and Management); Ipsita Roy (Graduate College "The Economics of Innovative Change" (DFG-GK-1411), Friedrich Schiller University Jena, Department of Economics)
    Abstract: Building on the notion of general and specific human capital proposed by Becker (1962), the paper highlights the importance of employee training practices undertaken in firms as an important tool for human resource and knowledge management and focuses on the role of works councils as a specific form of employee representation system therein. Using establishment data on various aspects of training practices and innovation activities in Germany, the paper examines the degree, type and extent to which establishments invest in employee training and finds significant differences for firms with and without works councils. Specifically, findings suggest that works councils are related more with the provision of generalized training rather than in firm-specific technical training of employees. In addition, the paper finds strong support for using works councils as an instrument for a firm's total training activities that correlate with innovation, and weak support when we consider only generalized training and innovation. Finally, no significant relation is found between training practices and radical innovativeness of firms after accounting for reverse causality.
    Keywords: employee training practices, knowledge management, generalized training, firm-specific technical training, works councils, innovation, radical innovation
    JEL: J5 M53 O3
    Date: 2014–03–10
  2. By: Andrej Angelovski (Department of Business Economics,Universitat Autonoma de Barcelona); Jordi Brandts (Department of Business Economics,Universitat Autonoma de Barcelona; Institutd'AnalisiEconomica(CSIC); Barcelona GSE); Carles Sola (Department of Business Economics,Universitat Autonoma de Barcelona)
    Abstract: In many organizations the measurement of job performance can not rely on easily quantifiable information. In such cases, supervising managers often use subjective performance evaluations. We use laboratory experiments to study whether the way employees are assigned to a manager affects managers’ and co-employees’ subjective evaluations of employees. Employees can either be hired by the manager, explicitly not hired by him and nevertheless assigned to him or exogenously assigned to him. We present data from three different treatments. For all three we find escalation bias both by managers and by co-employees. Managers exhibit a positive bias towards those employees they have hired or a negative one towards those they have explicitly not hired. Managers’ and employees’ biases are connected. Exogenously assigned employees are biased in favor of employees hired by the manager and against those explicitly not hired.
    Date: 2014–03
  3. By: Jordi Brandts; David J. Cooper; Roberto A. Weber
    Abstract: We study the effectiveness of leaders for inducing coordinated organizational change to a more efficient equilibrium, i.e., a turnaround. We compare communication from leaders to incentive increases and also compare the effectiveness of randomly selected and elected leaders. While all interventions yield shifts to more efficient equilibria, communication from leaders has a greater effect than incentives. Moreover, leaders who are elected by followers are significantly better at improving their group’s outcome than randomly selected ones. The improved effectiveness of elected leaders results from sending more performance-relevant messages. Our results are evidence that the way in which leaders are selected affects their legitimacy and the degree to which they influence followers. Finally, we observed that a combination of factors— incentive increases and elected leaders—yield near universal turnarounds to full efficiency.
    Keywords: leadership, job selection, coordination failure, experiments, communication
    JEL: C72 C92 D83
    Date: 2014–03
  4. By: Ghazala Azmat; Barbara Petrongolo
    Abstract: We discuss the contribution of the experimental literature to the understanding of both traditional and previously unexplored dimensions of gender differences and discuss their bearings on labor market outcomes. Experiments have offered new findings on gender discrimination, and while they have identified a bias against hiring women in some labor market segments, the discrimination detected in field experiments is less pervasive than that implied by the regression approach. Experiments have also offered new insights into gender differences in preferences: to gain less from negotiation, women appear to have lower preferences than men for risk and competition and may be more sensitive to social cues. These gender differences in preferences also have implications in group settings, whereby the gender composition of a group affects team decisions and performance. Most of the evidence on gender traits comes from the lab, and key open questions remain as to the source of gender preferences—nature versus nurture, or their interaction—and their role, if any, in the workplace.
    Keywords: Gender, field experiments, lab experiments, discrimination, gender preferences
    JEL: J16 J24 J71 C91 C92 C93
    Date: 2014–03
  5. By: Rafael Alvarado (Department of Economics, Universidad Tecnica Particular de Loja); Miguel Atienza (IDEAR - ORDHUM - Department of Economics, Universidad Católica del Norte - Chile)
    Abstract: This article examines the effect of market access and human capital on regional wage disparities in Ecuador using the wage equation of the core-periphery model of the New Economic Geography and a multi-level model. Our results, based on cross-sectional data, suggest that market access has a positive and statistically significant effect on wages, although this effect is relatively small. Only a small degree of regional wage variation can be attributed to the effect of market size, while the composition of the labor force explains a significant part of the reduction of regional wage disparities. Consequently, efforts to reduce the unequal spatial distribution of human capital can contribute to the reduction of regional income disparity.
    Keywords: Market access, Human capital, Wages, NEG. Multilevel regression, Ecuador.
    JEL: J31 R12 J24
    Date: 2014–03
  6. By: Sangyub Ryu (International University of Japan)
    Abstract: A top manager's social capital is considered as a critical resource for determining organizational outcome. However, little is known about the impacts of social capital on public organizations' performance. By dimensionalizing social capital into two, this study investigates impacts of a superintendentfs bonding and bridging social capital on the performance of school districts. Findings show that bridging social capital has positive impacts on organizational performance but in a time of financial difficulty, it worsens negative shocks of financial difficulty. Bonding social capital is found to be exactly the opposite. This study argues that bonding and bridging social capital is not an "either-or" question and top managers are required to balance the two contingent on the situation that their organizations face.
    Keywords: bonding, bridging, social capital, performance
    Date: 2014–03
  7. By: Elise S. Brezis; Rodolphe Dos Santos Ferreira
    Abstract: Since the seminal work of Becker, the dynamics of endogenous fertility has been based on the trade-off faced by parents between the quantity and the quality of their children. However, in developing countries, when child labor is an indispensable source of household income, parents actually incur a negative cost for having an extra child, so that the trade-off disappears. The purpose of this paper is to restore the Beckerian quantity-quality trade-off in the case intergenerational transfers are upstream, so as to keep fertility endogenous. We do that by adding a negative “sibship size effect” on human capital formation to the standard Becker model. With a simple specification, we obtain multiplicity of steady states or, more fundamentally, the possibility of a jump from a state with high fertility and low income to a state with low fertility and high income, triggered by a continuous increase in the productivity of human capital formation.
    Keywords: Endogenous fertility, Intergenerational transfers, Human capital formation, Demographic transition.
    JEL: E24 J13
    Date: 2014
  8. By: Sylvain, Serginio
    Abstract: Using a general equilibrium model with endogenous growth, I show that risk to human capital leads to a “Value” premium in equity returns. In particular, firms with relatively more firm-specific human capital or more positive covariance between asset growth and returns on human capital are less valuable (and hence have greater Book-to-Market Equity) and yield greater expected equity returns since human capital is more tied to the fate of said firms. Thus, I reproduce some of the results of Fama and French (1996) and show that in the model their HmL factor is a proxy for human capital risk as measured by macroeconomic and financial variables such as the covariance between human capital growth, or labor income growth, with the growth rate of firm assets. The model implies relatively lower investment-to-asset ratio and lower average asset growth for Value firms as observed in data and as argued in Zhang (2005). Furthermore, the model yields counter-cyclical Value premium and relative Book-to-Market Equity, greater long-run risk exposure for Value firms, and failure of the CAPM. Hence, it replicates several results from the related literature.
    Keywords: Adjustment cost, Book-to-Market Equity, Endogenous growth, General equilibrium, Human capital, Value Premium
    JEL: E20 G10 G12
    Date: 2014–03–14
  9. By: De Paola, Maria (University of Calabria); Scoppa, Vincenzo (University of Calabria)
    Abstract: Procrastination produces harmful effects for human capital investments and studying activities. Using data from a large sample of Italian undergraduates, we measure procrastination with the actual behaviour of students, considering the delay in finalizing their university enrolment procedure. We firstly show that procrastination is a strong predictor of students' educational achievements. This result holds true controlling for quite reliable measures of cognitive abilities, a number of background characteristics and indicators of students' motivation. Secondly, we investigate, using a Regression Discontinuity Design, the effects of a remedial program in helping students with different propensity to procrastinate. We show that the policy especially advantages students who tend to procrastinate, suggesting that also policies not directly aimed at handling procrastination can help to solve self-control problems.
    Keywords: procrastination, self-control, time preferences, time consistency, impatience, human capital, academic success, dropout, remedial courses
    JEL: D03 I21 D91 J01 J24
    Date: 2014–03

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