nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒03‒30
seven papers chosen by
Tommaso Reggiani
University of Cologne

  1. Tenure, experience, human capital and wages: a tractable equilibrium search model of wage dynamics By Jesper Bagger; Francois Fontaine; Jean-Marc Robin
  2. Optimal Employment Contracts with Hidden Search By Rasmus Lentz
  3. Intinsically Motivated Agents: Blessing or Curse for Firms ? By Ester Manna
  4. Optimal contracting with endogenous project mission By Lea Cassar
  5. Workplace Environment and Female Employment: An empirical analysis using firm panel data (Japanese) By YAMAMOTO Isamu
  6. Optimal Incentives in a Principal-Agent Model with Endogenous Technology By Marco A. Marini; Paolo Polidori; Desiree Teobaldelli; Davide Ticchi
  7. Educational Diversity and Knowledge Transfers via Inter-Firm Labor Mobility By Marino, Marianna; Parrotta, Pierpaolo; Pozzoli, Dario

  1. By: Jesper Bagger; Francois Fontaine; Jean-Marc Robin (Institute for Fiscal Studies and Sciences Po)
    Abstract: We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity and individual-level shocks. Career wage growth is decomposed into the contributions of human capital and job search, within and between jobs. Human capital accumulation is largest for highly educated workers, and both human capital accumulation and job search contribute to the observed concavity of wage-experience profiles. The contribution from job search to wage growth, both within- and between-job, declines over the first ten years of a career- the `job-shopping' phase of a working life - after which workers settle into high-quality jobs and use outside offers to generate gradual wage increases, thus reaping the benefits from competition between employers.
    Date: 2014–03
  2. By: Rasmus Lentz
    Abstract: In this paper I explore optimal employment contract design in a random search framework, where workers search on and off the job for employment opportunities similar to that of Lentz (2010) and Bagger and Lentz (2013). The worker determines the frequency by which employment opportunities arrive through a costly choice of search intensity, which is unobserved by the firm and cannot be directly contracted upon. Firms differ in productivity by which they employ workers. Firms compete over workers in terms of utility promises in a fashion otherwise similar to that of Postel-Vinay and Robin (2002). As in Burdett and Coles (2003) and Burdett and Coles (2010), optimal tenure conditional contracts are shown to be back loaded to discourage the worker from generating outside competitive pressure. The analysis establishes existence, uniqueness and provides characterization of the core mechanism. The paper applies the framework to the analysis of firm provided general human capital training. It is shown that more productive firms provide more training and pay higher wages.
    JEL: E24 J01 J24 J31 J33 J41 J6 J63 J64
    Date: 2014–03
  3. By: Ester Manna
    Abstract: I investigate whether the presence of intrinsically motivated agents benefits firms in a competitiveenvironment. I find that firms may obtain higher profits by hiring self-interested agents than byhiring motivated agents. This is because the agents’ intrinsic motivation has counteracting effectson the profits obtained by the firms. On the one hand, motivation has a positive impact on theprofits due to a reduction of wages. Motivated employees provide a given level of quality for a lowerwage. On the other hand, motivation has a negative impact on each firm’s profits. The agents’intrinsic motivation has a positive impact on the quality offered by the firms. With higher quality,the degree of differentiation of the products is relatively less important, increasing competition andreducing prices. Firms find themselves trapped in a prisoner’s dilemma in which the strategy ofhiring self-interested agents is strictly dominated by that of hiring motivated agents. Hence, thevery presence of motivated agents may hurt firms.
    Keywords: spatial competition; intrinsically motivated agents; prisoner's dilemma
    JEL: D30 D21 L13
    Date: 2013–10
  4. By: Lea Cassar
    Abstract: I present a model in which a principal selects one among many agents to develop a project and influences the agent’s ex post level of effort not by outcome-contingent rewards, but by the choice of the project’s mission. The closer the project’s mission to the agent’s preferred mission, the higher the agent’s intrinsic benefit from exerting effort. The principal and the agents disagree on what the project’s mission should be and the agents vary in how much they care about the project’s mission, i.e. they have heterogeneous unobservable intrinsic motivation levels. I derive the optimal mechanism (allocation rule, project’s mission, payment) to select and motivate the agent. I also consider situations where the project’s mission must be chosen prior to the allocation of the project and where the agents face budget constraints. Several applications are discussed.
    Keywords: Optimal contracting, non-monetary incentives, mission preferences, intrinsic motivation
    JEL: H41 D64 D82
    Date: 2014–03
  5. By: YAMAMOTO Isamu
    Abstract: This paper examines the kind of company which utilizes female employees using panel data of Japanese companies. It is shown that companies with shorter work hours for typical regular employees, higher turnover rates, less steep wage curves and larger wage dispersion, and better work-life balance practices tend to have a higher female proportion among regular employees and managers. These findings imply that the longer work hours, a longer duration of the employment period, larger fixed costs of employment, and a less flexible workplace environment could serve as obstacles in utilizing female employees. Since it is confirmed that a higher female employee proportion could increase a company's profit, it should be beneficial for companies to remove such obstacles and utilize female employees as regular workers and managers under the improved workplace environment.
    Date: 2014–03
  6. By: Marco A. Marini (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Paolo Polidori (University of Urbino); Desiree Teobaldelli (University of Urbino); Davide Ticchi (IMT Institute for Advanced Studies Lucca)
    Abstract: One of the standard predictions of the agency theory is that more incentives can be given to agents with lower risk aversion. In this paper we show that this relationship may be absent or reversed when the technology is endogenous and projects with a higher efficiency are also riskier. Using a modified version of the Holmstrom and Milgrom's (1987) framework, we obtain that lower agent's risk aversion unambiguously leads to higher incentives when the technology function linking efficiency and riskiness is elastic, while the risk aversion-incentive relationship can be positive when this function is rigid
    Keywords: principal-agent; incentives; risk aversion; endogenous technology
    Date: 2014
  7. By: Marino, Marianna (EPFL, Lausanne); Parrotta, Pierpaolo (Maastricht University); Pozzoli, Dario (KORA - Danish Institute for Local and Regional Government Research)
    Abstract: This article contributes to the literature on knowledge transfer via labor mobility by providing new evidence regarding the role of educational diversity in knowledge transfer. In tracing worker flows between firms in Denmark over the period 1995-2005, we find that knowledge carried by workers who have been previously exposed to educationally diverse workforces significantly increases the productivity of hiring firms. Several extensions of our baseline specification support this finding and show that insignificant effects are associated with the prior exposure of newly hired employees to either demographic or culturally diverse workplaces.
    Keywords: educational diversity, knowledge transfer, inter-firm labor mobility, firm productivity
    JEL: J24 J60 L20
    Date: 2014–03

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