nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒04‒05
fifteen papers chosen by
Tommaso Reggiani
University of Cologne

  1. Striving for Excellence: University Competition, Quality Perceptions, and Ability Sorting By Mira Fischer; Patrick Kampkoetter
  2. Misallocation, informality, and human capital: understanding the role of institutions By D'Erasmo, Pablo; Moscoso Boedo, Herman J.; Senkal, Asli
  3. Employment risk and job-seeker performance: By Godlonton, Susan
  4. The Nature of Surgeon Human Capital Depreciation By Jason M. Hockenberry; Lorens A. Helmchen
  5. Reforming Human Capital and Human Resource Management: A bird's-eye view (Japanese) By TSURU Kotaro
  6. Political selection in the skilled city By Antonio Accetturo
  7. On the Role of Group Size in Tournaments: Theory and Evidence from Lab and Field Experiments By John A. List; Daan Van Soest; Jan Stoop; Haiwen Zhou
  8. Health information, treatment, and worker productivity: Experimental evidence from malaria testing and treatment among Nigerian sugarcane cutters By Andrew Dillon; Jed Friedman; Pieter Serneels
  9. Sociability, Altruism and Subjective Well-Being By Leonardo Becchetti; Nazaria Solferino; M. Elisabetta Tessitore
  10. Why firms avoid cutting wages: survey evidence from European firms By Philip Du Caju; Theodora Kosma; Martina Lawless; Julian Messina; Tairi Room
  11. Playing 'Hard to Get': An Economic Rationale for Crowding Out of Intrinsically Motivated Behavior By Schnedler, Wendelin; Vanberg, Christoph
  12. The impact of public research contracts on scientific productivity By César Alonso-Borrego; Antonio Romero-Medina; Rocío Sánchez Mangas
  13. Workers' propensity to cooperate with colleagues and the general population: a comparison based on a field experiment By Ermanno Tortia; Martha Knox Haly; Anthony Jensen
  14. Diversification of Work Conditions, Views, and Employment Situations in Japan: Evidence from the RIETI web survey (Japanese) By KUME Koichi; OHTAKE Fumio; TSURU Kotaro
  15. Do we need to worry if people bowl alone? Results from a field experiment with voluntary association members By Giacomo Degli Antoni

  1. By: Mira Fischer (University of Cologne); Patrick Kampkoetter (University of Cologne)
    Abstract: We study the effects of a label awarded to universities for excellence in research on students' perception of educational quality and enrolment in subsequent admission terms. Using a representative student survey we find that students evaluate the teaching and supervision quality of their institution better immediately after it was labelled "excellent". Furthermore, the award of the excellence label allow universities to enrol better high school graduates in subsequent admission terms, with economics students showing the strongest response. Our results provide evidence that students use the label as a signal for educational quality that affects application decisions and reinforces ability sorting between universities, a side-effect of a policy designed to raise efficiency of universities.
    Keywords: higher education, university choice, student evaluations, labelling effect
    JEL: I23 D80 H52
    Date: 2014–03–22
  2. By: D'Erasmo, Pablo (Federal Reserve Bank of Philadelphia); Moscoso Boedo, Herman J. (University of Virginia); Senkal, Asli (University of Virginia)
    Abstract: Accepted for publication, Journal of Economic Dynamics and Control The aim of this paper is to quantify the role of formal-sector institutions in shaping the demand for human capital and the level of informality. We propose a firm dynamics model where firms face capital market imperfections and costs of operating in the formal sector. Formal firms have a larger set of production opportunities and the ability to employ skilled workers, but informal firms can avoid the costs of formalization. These firm-level distortions give rise to endogenous formal and informal sectors and, more importantly, affect the demand for skilled workers. The model predicts that countries with a low degree of debt enforcement and high costs of formalization are characterized by relatively lower stocks of skilled workers, larger informal sectors, low allocative efficiency, and measured TFP. Moreover, we find that the interaction between entry costs and financial frictions (as opposed to the sum of their individual effects) is the main driver of these differences. This complementarity effect derives from the introduction of skilled workers, which prevents firms from substituting labor for capital and in turn moves them closer to the financial constraint.
    Keywords: Financial Structure; Informal Sector; Productivity; Policy Distortions; Human Capital;
    JEL: D24 E26 J24 L11 O16 O17
    Date: 2014–03–24
  3. By: Godlonton, Susan
    Abstract: This paper examines the relationship between employment risk and job-seeker performance. To induce exogenous variation in employment risk, the outside options for job seekers undergoing a real recruitment process were randomized by assigning them a 0, 1, 5, 50, 75, or 100 percent chance of real alternative employment of the same duration and wage as the jobs for which they were applying. The findings show that job-seeker performance is highest and effort is lowest among those assigned the lowest employment risk (a guaranteed alternative job), and performance is lowest and effort highest among those facing the highest employment risk (those without any job guarantee). Moreover, a nonlinear relationship exists between employment risk and performance.
    Keywords: Labor, Markets, Economics, Labor market, employment risk, performance, recruitment, randomized controlled trials, stress,
    Date: 2014
  4. By: Jason M. Hockenberry; Lorens A. Helmchen
    Abstract: To test how practice interruptions affect worker productivity, we estimate how temporal breaks affect surgeons’ performance of coronary artery bypass grafting (CABG). Using a sample of 188 surgeons who performed 56,315 CABG procedures in Pennsylvania between 2006 and 2010, we find that a surgeon’s additional day away from the operating room raised patients’ inpatient mortality risk by up to 0.067 percentage points (2.4% relative effect) but reduced total hospitalization costs by up to 0.59 percentage points. In analyses of 93 high-volume surgeons treating 9,853 patients admitted via an emergency department, where temporal distance effects are most plausibly exogenous, an additional day away raised mortality risk by 0.398 percentage points (11.4% relative effect) but reduced cost by up to 1.396 percentage points. These estimates imply a cost per life-year saved ranging from $7,871 to $18,500, rendering additional treatment intensity within surgery cost-effective at conventional cutoffs. Our findings are consistent with the hypothesis that after returning from temporal breaks surgeons may be less likely to recognize and address life-threatening complications, in turn reducing resource use. This form of human capital loss would explain the decrease in worker productivity and the simultaneous reduction in input use.
    JEL: I10 J24
    Date: 2014–03
  5. By: TSURU Kotaro
    Abstract: Amid the rapid aging of its society and intensifying global competition, utilizing its human resources is a significant key for Japan, a nation which lacks relatively in natural resources, to maintain and strengthen its economic dynamism and increase its growth potential. This paper provides a multifaceted and comprehensive view on measures to strengthen human capital and human resource capabilities, from a full lifecycle perspective. It is important to clarify the concrete image of workers' talents or abilities that are demanded by industry and to examine an appropriate educational system that is able to cultivate such abilities. During the course of the employment years, promoting mutual trust inside firms and a long-term commitment to skill development will lead to developing a new work style that can open the door to a bright future for workers. Moreover, elderly human resources should be utilized to promote the skills of young people in their companies or local communities.
    Date: 2014–03
  6. By: Antonio Accetturo (Bank of Italy)
    Abstract: This paper studies the impact of citizens’ human capital on the characteristics of elected politicians in democratic elections for the post of mayor. By using a change in the rules for Italian mayoral elections and a difference-in-differences estimator, I find that cities endowed with a larger amount of human capital tend to elect mayors that have a higher educational attainment and that were previously employed in skill-intensive jobs. This result is quantitatively small but robust to omitted variables or selection issues.
    Keywords: human capital externalities, political selection, cities
    JEL: D7 I20 H8
    Date: 2014–03
  7. By: John A. List; Daan Van Soest; Jan Stoop; Haiwen Zhou
    Abstract: Both private and public organizations constantly grapple with incentive schemes to induce maximum effort from agents. We begin with a theoretical exploration of optimal contest design, focusing on the number of competitors. Our theory reveals a critical link between the distribution of luck and the number of contestants. We find that if there is considerable (little) mass on good draws, equilibrium effort is an increasing (decreasing) function of the number of contestants. Our first test of the theory implements a laboratory experiment, where important features of the theory can be exogenously imposed. We complement our lab experiment with a field experiment, where we rely on biological models complemented by economic models to inform us of the relevant theoretical predictions. In both cases we find that the theory has a fair amount of explanatory power, allowing a deeper understanding of how to effectively design tournaments. From a methodological perspective, our study showcases the benefits of combining data from both lab and field experiments to deepen our understanding of the economic science.
    JEL: C9 C91 C93 H41
    Date: 2014–03
  8. By: Andrew Dillon; Jed Friedman; Pieter Serneels
    Abstract: Agricultural and other physically demanding sectors are important sources of growth in developing countries but prevalent diseases such as malaria adversely impact the productivity, labor supply, and occupational choice of workers in these sectors by reducing physical capacity. This study identifies the impact of malaria on worker earnings, labor supply, and daily productivity by randomizing the temporal order at which piece-rate workers at a large sugarcane plantation in Nigeria are offered malaria testing and treatment. The results indicate a significant and substantial intent to treat effect of the intervention – the offer of a workplace based malaria testing and treatment program increases worker earnings by approximately 10% over the weeks following the mobile clinic visit. The study further investigates the effect of health information by contrasting program effects by workers revealed health status. For workers who test positive for malaria, the treatment of illness increases labor supply, leading to higher earnings. For workers who test negative, and especially for those workers most likely to be surprised by the healthy diagnosis, the health information also leads to increased earnings via increased productivity. Possible mechanisms for this response include selection into higher return occupations as a result of changes in the perceived cost of effort. A model of the worker labor decision that includes health perceptions in the decision to supply effort suggests that, in endemic settings with poor quality health services, inaccurate health perceptions may lead workers to misallocate labor thus resulting in sub-optimal production and occupational choice. The results underline the importance of medical treatment but also of access to improved information about one’s health status, as the absence of either may lead workers to deliver lower than optimal effort levels in lower return occupations.
    Keywords: malaria, labor supply, labor productivity, randomized experiment
    JEL: I12 J22 J24 O12
    Date: 2014
  9. By: Leonardo Becchetti (University of Rome "Tor Vergata"); Nazaria Solferino (University of Rome "Tor Vergata"); M. Elisabetta Tessitore (University of Rome "Tor Vergata")
    Abstract: The choice between performing a task today or procrastinating it until tomorrow or later is the building block of any economic action. In our paper we aim to enrich the theoretical literature on procrastination by outlining conditions for bad and good procrastination and looking at the special cases of pathological procrastination, the curse of perfec- tionism and productive procrastination. We discuss how our theoreti- cal framework may be applied to explain different types of (education, investment and production) microeconomic decisions and which policy measures can be taken to avoid bad procrastination.
    Keywords: Time-Inconsistent Preferences, Optimal Effort, Procras- tination, Intertemporal Choice
    JEL: A12 D03 D11 D74 D91
    Date: 2014–03
  10. By: Philip Du Caju (National Bank of Belgium); Theodora Kosma (Bank of Greece); Martina Lawless (Central Bank of Ireland); Julian Messina (World Bank and Universitat de Girona); Tairi Room (Eesti Pank)
    Abstract: The rarity with which firms reduce nominal wages has been frequently observed, even in the face of considerable negative economic shocks. This paper uses a unique survey of fourteen European countries to ask firms directly about the incidence of wage cuts and to assess the relevance of a range of potential reasons for why they avoid cutting wages. Concerns about the retention of productive staff and a lowering of morale and effort were reported as key reasons for downward wage rigidity across all countries and firm types. Restrictions created by collective bargaining were found to be an important consideration for firms in euro area countries but were one of the lowest ranked obstacles in non-euro area countries. The paper examines how firm characteristics and collective bargaining institutions affect the relevance of each of the common explanations put forward for the infrequency of wage cuts
    Keywords: labour costs; wage rigidity; firm survey; wage cuts; European Union
    JEL: J30 J32 J33 J51 C81 P5
    Date: 2014–01
  11. By: Schnedler, Wendelin; Vanberg, Christoph
    Abstract: Anecdotal, empirical, and experimental evidence suggests that offering extrinsic rewards for certain activities can reduce people's willingness to engage in those activities voluntarily. We propose a simple rationale for this 'crowding out' phenomenon, using standard economic arguments. The central idea is that the potential to earn rewards in return for an activity may create incentives to play 'hard to get' in an effort to increase those rewards. We discuss two specic contexts in which such incentives arise. In the first, refraining from the activity causes others to attach higher value to it because it becomes scarce. In the second, restraint serves to conceal the actor's intrinsic motivation. In both cases, not engaging in the activity causes others to offer larger rewards. Our theory yields the testable prediction that such effects are likely to occur when a motivated actor enjoys a sufficient degree of 'market power.'
    Keywords: intrinsic motivation; crowding out; behavioral economics; market power; hidden information
    Date: 2014–03–21
  12. By: César Alonso-Borrego; Antonio Romero-Medina; Rocío Sánchez Mangas
    Abstract: We analyze a competitive research-oriented public program established in Spain, the Ramon yCajal Program, intended to offer contracts in public research centers to high-quality researchers.We study the effects of the Program on the ex-post scientific productivity of its recipients, relativeto unsuccessful applicants with comparable curricula at the time of application. The full sampleresults demonstrate that the Program has a positive and significant effect on the scientific impactof the recipients, as measured by the average and the maximum impact factors, but the effect onthe number of published papers is not significant. Consequently, receiving a contract does notsignificantly affect the quantity, but increases the quality, of the contract recipients' publications.This result is primarily driven by the particular relevance of experimental sciences in the Program.
    Keywords: Ramon y Cajal Program, Brain Gain, Research Productivity, Government Research Programs, Human Capital, Policy Evaluation, Matching
    JEL: O38 D78 C21 I23 O31
    Date: 2014–05
  13. By: Ermanno Tortia (University of Trento, Department of Economics and Management); Martha Knox Haly (University of Sydney, Business School); Anthony Jensen (University of Sydney, Business School)
    Abstract: The current paper is a comparative analysis of employee participation in organisational governance in Italy and Australia. Cultural values determine the expression of institutional configurations, and to this end, we have adopted Hall and Soskice's Varieties of Capitalism and the Theory of the Firm as informing theoretical frameworks for our comparative study. Hall and Soskice represent Italy as a hybrid economy, and Australia as a liberal market lead economy. The main theoretical contribution of our paper is twofold. First, we hypothesize that the Australian Liberal Market Economic Configuration offers fewer opportunities for employee participation in organisational governance. Second, we critique mainstream Theory of the Firm on the ground that it is inadequate in explaining the phenomenon of employee participation across both economic configurations. We tested our hypotheses on some crucial institutional dimensions: (i) the role of the industrial relations system; (ii) the nature of corporate law; (iii) and the relative diffusion of different organisational forms with participative vis à vis exclusionary governance (although we acknowledge that participatory organisational forms are rare in both Italy and Australia) . We find support for differential facilitation of employee participation across Australian LME and Italian Hybrid economies.
    Keywords: worker cooperatives; worker control; third sector; neo liberal firm; industrial relations; labour law; corporate law; Australia; Italy
  14. By: KUME Koichi; OHTAKE Fumio; TSURU Kotaro
    Abstract: While work styles and preferences of workers in Japan are diversified, the conventional labor policy cannot cope fully with the issues from the diversification. To clarify the issues, Research Institute of Economy, Trade and Industry (RIETI) conducted an online survey. In this paper, we analyzed the results of the survey and argued its policy implication. Specifically, we discussed the difference between employment status and actual work, skill formation of workers, a limited regular employee system, compensating wage premiums for insecure jobs, an evaluation and response to the Labor Contract Act revision, the pros and cons of the Temporary Staff Services Law revision, the pecuniary compensation of dismissal, and the attitude toward a trade-off between tax burden and the expansion of social security service. It was found that actual employment styles vary more than the classification of employment status. Very few people can express clearly the pros and cons against legal revision. The answers to the counterfactual questionnaire show that the requested amount of pecuniary compensation for dismissals varies greatly. These results suggest that it is desirable to take into consideration of the various preferences and work styles of workers and the influence of the law revision on workers in making policy in order to cope with the issues of diversified and complicated employment.
    Date: 2014–03
  15. By: Giacomo Degli Antoni (University of Parma, Department of Law)
    Abstract: Trust in strangers is key for economic development. Social capital theory posits that participation in associations is essential to propagate trust in society, because membership instils trust both towards other members and generalised others. We provide an experimental test for this thesis. We measure members' trust and trustworthiness when interacting with fellow members or with people from the general population, who are not association members. We find that members trust and reward trust more than non- members, and do not discriminate between members and the general population. However, we find no correlation between the intensity of associational participation and increased pro-sociality.Length: 17
    Keywords: trust; voluntary associations; ingroup favouritism; field experiment
    JEL: C93 D71 D69 D03
    Date: 2014–04

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