nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒09‒25
eight papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. Peer Enforcement in Teams: Evidence from High-Skill Professional Workers with Repeated Interactions By Brad R. Humphreys; Jie Yang
  2. Creativity, Education or What? On the Measurement of Regional Human Capital By Eckhardt Bode; Lucia Perez Villar
  3. Competition and Screening with Skilled and Motivated Workers By F. Barigozzi; N. Burani
  4. Managers’ External Social Ties at Work: Blessing or Curse for the Firm? By Leif Brandes; Marc Brechot; Egon Franck
  5. Reciprocity in the labour market: experimental evidence By Annarita COLASANTE; Alberto RUSSO
  6. The impact of race and inequality on human capital formation in Latin America during the Nineteenth and Twentieth Centuries By Enriqueta Camps; Stanley Engerman
  7. Independent directors: less informed, but better selected? New evidence from a two-way director-firm fixed effect model By Sandra Cavaco; Patricia Crifo; Antoine Reberioux; Gwenael Roudaut
  8. Sickness Absence and Works Councils - Evidence from German Individual and Linked Employer-Employee Data By Daniel Arnold; Tobias Brändle; Laszlo Goerke

  1. By: Brad R. Humphreys (West Virginia University, College of Business and Economics); Jie Yang (University of Alberta, Department of Economics)
    Abstract: Organizing employees into teams increases productivity but also generates incentives to shirk. Recent research suggests that peer enforcement plays an important role in deterring shirking in teams. We analyze 10 years of performance and compensation data for NFL offensive linemen, a high-skill, high-salary and repeatedly interacting team, using the Hausman-Taylor estimator to control for unobservable individual-specific heterogeneity. We find evidence that teammates’ effort signals reduce the salaries of individual offensive linemen, providing an optimal, low powered sanctioning mechanism for individual workers in this setting, and that a separate, independently monitored individual effort signal also reduces salaries.
    Keywords: peer enforcement, teams, shirking, incentives
    JEL: J24 J3 J44 L83
    Date: 2014–08
  2. By: Eckhardt Bode; Lucia Perez Villar
    Abstract: This paper substantiates the debate following Richard Florida’s suggestion to measure regional human capital by creative occupations rather than education. Consistent with Florida’s notion of creativity, it suggests a microfoundation that relates creativity to workers’ cognitive and noncognitive skills. It shows that this microfoundation is similar to that of human capital in recent labor economics, which has facilitated important new insights. It also shows that Florida’s measure is too crude to make a difference. Nonethe-less, it is time to rethink regional human capital. Occupations may help project workers’ cognitive and noncognitive skills from the micro to the regional level
    Keywords: Human Capital, Education, Creativity, Cognitive Skills, Noncognitive Skills, Occupation, Regional Wages, Regional Growth
    JEL: I21 I25 J24 R12 R23
    Date: 2014–09
  3. By: F. Barigozzi; N. Burani
    Abstract: We study optimal contracts offered by two firms competing for the exclusive services of one worker, who is privately informed about her ability and her motivation. Firms differ both in their production technology and in the mission they pursue and a motivated worker is keen to be hired by the mission-oriented firm. We find that the matching of worker types to firms is always Pareto-efficient. When the difference in firms’ technology is high, only the most efficient firm is active. When the difference is not very high, then agent types sort themselves by motivation: the mission-oriented firm hires motivated types and the profit-oriented firm employs non-motivated ones, independently of ability. Effort provision is higher when the worker is hired by the mission-oriented firm, but a compensating wage differential might exist: the motivated worker is paid less by the mission-oriented firm. Such an earnings penalty is driven entirely by motivation, is increasing in ability and is associated to low power of incentives.
    JEL: D82 D86 J31 M55
    Date: 2014–06
  4. By: Leif Brandes (Warwick Business School, University of Warwick); Marc Brechot (Department of Business Administration, University of Zurich); Egon Franck (Department of Business Administration, University of Zurich)
    Abstract: Existing evidence shows that decision-makers’ social ties to internal co-workers can lead to reduced firm performance. In this paper, we show that decision-makers’ social ties to external transaction partners can also hurt firm performance. Specifically, we use 34 years of data from the National Basketball Association and study the relationship between a team's winning percentage and its use of players that the manager acquired through social ties to former employers in the industry. We find that teams with “tie-hired-players” underperform teams without tie-hired-players by 5 percent. This effect is large enough to change the composition of teams that qualify for the playoffs. Importantly, we show that adverse selection of managers and teams into the use of tie-hiring procedures cannot fully explain this finding. Additional evidence suggests instead that managers deliberately trade-off private,tie-related benefits against team performance.
    Keywords: social relationships; social capital; principal-agent relationship; worker allocation; basketball
    JEL: D82 M51 Z13
    Date: 2014–05
  5. By: Annarita COLASANTE (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Alberto RUSSO (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)
    Abstract: In this paper we focus on the impact of involuntary unemployment on wage formation using experimental evidence. We use the well-known Gift Exchange Game to analyze players' interaction in a simplified job market. The aim of this paper is twofold: on the one hand, we are interested in analyzing the relation between involuntary unemployment and wages; on the other hand, we aim at understanding whether the interaction between employers and employees could be affected by reciprocity. Our results show that unemployment has a negative impact on wages. Moreover, there is a positive correlation between wage and effort.
    Keywords: Gift Exchange, Reciprocity, Unemployment
    JEL: C91 E24 J28 J30
    Date: 2014–08
  6. By: Enriqueta Camps; Stanley Engerman
    Date: 2014–09
  7. By: Sandra Cavaco (LEMMA - Laboratoire d'économie mathématique et de microéconomie appliquée - Université Paris II - Panthéon-Assas : EA4442 - Sorbonne Universités); Patricia Crifo (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, UP10 - Université Paris 10, Paris Ouest Nanterre La Défense - Université Paris X - Paris Ouest Nanterre La Défense, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal, EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense); Antoine Reberioux (EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense, CREDDI/LEAD Université Antilles Guyane - Université des Antilles et de la Guyane); Gwenael Roudaut (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, AgroParisTech - AgroParisTech)
    Abstract: This paper develops a two-way director-firm fixed effect model to study the relationship between independent directors' individual heterogeneity and firm operating performance, using French data. This strategy allows considering and differentiating in a unified empirical framework mechanisms related to board functioning and to director selection. We first show that the independence status, netted out unobservable individual heterogeneity, is negatively related to performance. This result suggests that independent board members experience an informational gap compared to other affiliated members. However, we show that industry-specific expertise as well as informal connections inside the boardroom may help to bridge this gap. Finally, we provide evidence that independent directors have higher intrinsic ability as compared to affiliated board members, consistent with a reputation-based selection process.
    Keywords: independent director heterogeneity, information asymmetry, director selection, firm performance, two-way fixed effect model
    Date: 2014–09–03
  8. By: Daniel Arnold (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Tobias Brändle (Institut für Angewandte Wirtschaftsforschung (IAW), University of Tübingen); Laszlo Goerke (Institute for Labour Law and Industrial Relations in the EU, University of Trier)
    Abstract: Using both household and linked employer-employee data for Germany, we assess the effects of non-union representation in the form of works councils on (1) individual sickness absence rates and (2) a subjective measure of personnel problems due to sickness absence as perceived by a firm's management. We find that the existence of a works council is positively correlated with the incidence and the annual duration of absence. We observe a more pronounced correlation in western Germany which can also be interpreted causally. Further, personnel problems due to absence are more likely to occur in plants with a works council.
    Keywords: Absenteeism, LIAB, personnel problems, sickness absence, SOEP, works councils
    JEL: J53 I18 M54
    Date: 2014–08

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