nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒05‒24
eleven papers chosen by
Tommaso Reggiani
University of Cologne

  1. Job competition, employability and incentives for human capital formation By Shaked, Avner; Cristobal Campoamor, Adolfo
  2. When Pay Increases are Not Enough: The Economic Value of Wage Delegation in the Field By Vanessa Mertins; Sabrina Jeworrek
  3. Equality under threat by the talented: evidence from worker-managed firms By Gabriel Burdín
  4. Peers at work: From the field to the lab By van Veldhuizen, Roel; Oosterbeek, Hessel; Sonnemans, Joep
  5. Socially gainful gender quotas By Stark, Oded; Hyll, Walter
  6. The Sources of the Urban Wage Premium by Worker Skills By Andersson, Martin; Klaesson , Johan; Larsson , Johan P
  7. Board Independence, CEO Pay, and Camouflaged Compensation By Pablo Ruiz-Verdú; Ravi Singh
  8. Compensation of a Manager: The Case of Major League Baseball By Randy Silvers; Raul Susmel
  9. Workplace Training Programs: Instruments for Human Capital Improvements or Screening Devices? By Brunetti, Irene; Corsini, Lorenzo
  10. Determinants of flexible work arrangements By Sarbu, Miruna
  11. Are the education policy preferences of teachers just a reflection of their occupational concerns? By Chantal Oggenfuss; Stefan C. Wolter

  1. By: Shaked, Avner; Cristobal Campoamor, Adolfo
    Abstract: This note describes the effects on human capital formation of rank-order tournaments offering identical prizes to a given share of the ranked contestants. This compensation scheme is thought to resemble the selection processes in different areas of the public administration, particularly in Southern European countries. In the presence of contestants with identical ability, the incentives for educational effort are highest when the variance of final returns is maximized.
    Keywords: Human capital formation, tournaments, benchmarking, public sector, employability
    JEL: D8 I2 I24 J08
    Date: 2014–05–18
  2. By: Vanessa Mertins (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Sabrina Jeworrek (Institute for Labour Law and Industrial Relations in the EU, University of Trier)
    Abstract: By conducting a natural field experiment, we test whether a managerial policy of allowing employees to self-determine their wages is as successful as recently suggested by laboratory evidence. We find that this policy indeed enhances performance. However, our data is clearly at odds with the conjecture of Pareto improvements, since labor costs grow even faster. Admittedly, the performance change is remarkable given that a considerable pay increase has no effect at all. Surprisingly, the data suggests that explicitly denying parts of the workforce this choice boosts performance, too. Additional experimental and survey data provides important insights into employees' underlying motivations.
    Keywords: Field experiment, Delegation, Reciprocity, Responsibility alleviation, Compensation, Worker empowerment, Workplace democracy
    JEL: C91 C93 J33 M52 M54
    Date: 2014–05
  3. By: Gabriel Burdín (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: Are high-ability individuals more likely to quit egalitarian regimes? Does the threat of exit by talented individuals restrict the redistributive capacity of democratic organizations? This paper revisits that long-standing debate by analyzing the interplay between compensation structure and quit behavior in the distinct yet underexplored institutional setting of worker-managed firms. The study exploits two novel administrative data sources: a panel of Uruguayan workers employed in both worker-managed and conventional firms; and a linked employer–employee panel data set covering the population of Uruguayan worker-managed firms and their workers from January 1997 to April 2010. A key advantage of the data is that it enables one to exploit within-firm variation on wages to construct an ordinal measure of the worker ability type. The paper's four main findings are that (1) worker-managed firms redistribute in favor of low-wage workers; (2) in worker-managed firms, high-ability members are more likely than other members to exit; (3) the hazard ratio of high-ability members is lower for founding members and for those employed by worker-managed firms in which there is less pay compression; and (4) high-ability members are less likely to quit when labor market conditions in the capitalist sector are less attractive. This paper contributes to the study of the interplay between equality and incentives that permeates many debates in public finance, comparative economic systems, personnel and organizational economics.
    Keywords: labor managed firms, redistribution, compensation structure, job mobility
    JEL: H00 J54 J62 M52 P0
    Date: 2013–10
  4. By: van Veldhuizen, Roel; Oosterbeek, Hessel; Sonnemans, Joep
    Abstract: In an in influential study, Mas and Moretti (2009) found that worker effort is positively related to the productivity of workers who see him, but not workers who do not see him. They interpret this as evidence that social pressure can reduce free riding. In this paper we report an attempt to reproduce the findings of Mas and Moretti in a lab experiment. Lab experiments have the advantage of being able to shut down alternative channels through which workers can influence the productivity of colleagues whom they observe. Although the subjects in our experiment are aware of the productivity of others and although there is sufficient scope for subjects to vary their productivity, we find no evidence of the type of peer effects reported by Mas and Moretti. This suggests that their findings are less generalizable than has been assumed. --
    Keywords: peer effects,experiment,laboratory experiment
    JEL: C91 J24
    Date: 2014
  5. By: Stark, Oded; Hyll, Walter
    Abstract: We study the impact of gender quotas on the acquisition of human capital. We assume that individuals' formation of human capital is influenced by the prospect of landing high-pay top positions, and that these positions are regulated by gender-specific quotas. In the absence of quotas, women consider their chances of getting top positions to be lower than men's. The lure of top positions induces even men of relatively low ability to engage in human capital formation, whereas women of relatively high ability do not expect to get top positions and do not therefore engage in human capital formation. Gender quotas discourage men who are less efficient in forming human capital, and encourage women who are more efficient in forming human capital. We provide a condition under which the net result of the institution of gender quotas is an increase in human capital in the economy as a whole. --
    Keywords: Gender quotas,Affirmative action,Human capital formation
    JEL: D01 D21 J16 J24 J70 M51
    Date: 2014
  6. By: Andersson, Martin (CIRCLE, Lund University); Klaesson , Johan (Department of Economics, Finance and Statistics, Jönköping International Business School); Larsson , Johan P (Department of Economics, Finance and Statistics, Jönköping International Business School)
    Abstract: We estimate the respective importance of spatial sorting and agglomeration economies in explaining the urban wage premium for workers with different sets of skills. Sorting is the main source of the wage premium. Agglomeration economies are in general small, but are larger for workers with skills associated with non-routine job tasks. They also appear to involve human capital accumulation, as evidenced by the change in the wage of workers moving away from denser regions. For workers with routine jobs, agglomeration economies are virtually non-existent. Our results provide further evidence of spatial density bringing about productivity advantages primarily in contexts when problem-solving and interaction with others are important.
    Keywords: spatial sorting; selection; learning; non-routine skills; spatial wage disparities; density; agglomeration economies; innovation
    JEL: J24 J31 R12
    Date: 2014–05–22
  7. By: Pablo Ruiz-Verdú; Ravi Singh
    Abstract: We study how directors' reputational concerns influence executive compensation and the use ofcamouflaged forms of pay. We show that, in order to signal their independence to investors,boards lower managers' pay, but may also pay managers in hidden ways or structure compensationinefficiently. We also show that independent boards are more likely to make use of hiddencompensation than manager-friendly boards. We apply our model to study the costs and benefitsof greater pay transparency and of measures, such as say-on-pay initiatives, that increase boards'accountability to shareholders
    Keywords: Executive compensation, Board independence, Hidden pay, Signaling, Director, Reputation
    Date: 2014–03
  8. By: Randy Silvers; Raul Susmel
    Abstract: In this paper, we are interested in the impact a Major League Baseball (MLB) manager has on a team’s outcome. Using data on manager’s contracts, team performance, and team and manager characteristics, first, we determine the variables that determine a manager's salary. Then, we use a forecasting-type analysis to study the determinants of a manager’s performance, measured by winning percentage, attendance or playoff appearances. We find that a manager's past performance affects his current salary, but his current salary does not affect the team's performance. Our results support the lack of a competitive and efficient market for MLB managers.
    Date: 2014–05–17
  9. By: Brunetti, Irene; Corsini, Lorenzo
    Abstract: In this paper we analyse the effect of an Italian training program on the re-employment probability of young unemployed workers. The program consists solely of workplace training and is coordinated by employment centre, but it is fully implemented by firms. We develop a discrete duration analysis and our results suggest that workplace training improves only the immediate re-employability of trained workers, failing to bestow them with durable human capital improvements. These results appear to be robust to spurious duration dependence and to self-selection. Our analysis focuses on the role of unobserved heterogeneity and, accounting for it, we show that the training implementation is useful to sort “good” trainees from “bad” ones: therefore we suggest that firms are exploiting training as a screening device.
    Keywords: duration model; policy evaluation; propensity score matching; screening device; workplace training; youth unemployment.
    JEL: C41 I38 J64 J68 M53
    Date: 2014–05–12
  10. By: Sarbu, Miruna
    Abstract: Flexible work arrangements such as allowing employees to work at home are used in firms, especially since information and communication technologies have become so widespread. Using individual-level data from 10,884 German employees, this paper analyses the determinants of working at home as a form of flexible work arrangements. The analysis is based on descriptive analyses and a discrete choice model using a probit estimation approach. The results reveal that men have a higher probability to work at home but women are more likely to work at home intensively. Education, tenure and the use of computers increase the probability of working at home while firm size and a young age of employees reduce it. Having children less than six years old, overtime and work time have a positive impact on both working at home and on working at home intensively. --
    Keywords: work at home,telecommuting,home office,workplace organisation
    JEL: J01 J10 J20
    Date: 2014
  11. By: Chantal Oggenfuss (Swiss Coordination Centre for Research in Education (SKBF), Aarau); Stefan C. Wolter (Swiss Coordination Centre for Research in Education (SKBF), Aaraum University of Bern, University of Bern, CESifo, Munich, & IZA, Bonn)
    Abstract: Education policy opinions and preferences of teachers are important not only in shaping public opinion, they also play a key role in ensuring the acceptance, and hence the implementation, of education reforms. While media communicates a great deal about the education policy preferences of the organised teaching body, we know little to nothing about how much these preferences coincide with or differ from those of the rest of the population. On the basis of two representative opinion polls on education policy issues in Switzerland (2007, 2012), we analysed the differences in preferences between those who have completed teacher training and the rest of the population. This shows that preferences differ statistically significantly if the topic has a direct relation to teachersÕ working conditions. By contrast, in all other topics which relate to teachersÕ working conditions only indirectly or not at all, there are no differences in preferences. Alongside their specialist knowledge, therefore, vested interests of teachers must undoubtedly be considered as an explanation of different education policy preferences.
    Keywords: Educational policies, public opinion, teachers
    JEL: I20 I29 J38
    Date: 2014–05

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