nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒12‒03
thirteen papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. The Contribution of Managers to Organizational Success: Evidence from German Soccer By Hentschel, Sandra; Muehlheusser, Gerd; Sliwka, Dirk
  2. Does Relative Grading Help Male Students? Evidence from a Field Experiment in the Classroom By Czibor, Eszter; Onderstal, Sander; Sloof, Randolph; van Praag, Mirjam C.
  3. Innovation, Productivity, and Training By Dostie, Benoit
  4. The Economic Payoff of Creating Good Job Conditions: Theory and Evidence from Latin America By Chaparro, Juan; Lora, Eduardo
  5. Incentive schemes, private information and the double-edged role of competition for agents By Bannier, Christina E.; Feess, Eberhard; Packham, Natalie
  6. Bounds on the Welfare Loss of Moral Hazard with Limited Liability By Felipe Balmaceda; Santiago Balseiro; Jose Correa; Nicolas Stier-Moses
  7. Workplace health promotion and labour market performance of employees By Martin Huber; Michael Lechner; Conny Wunsch
  8. Human capital and trends in the transmission of economic status across generations in the U.S. By Richey, Jeremiah; Rosburg, Alicia
  9. Gary Becker's Contributions in Health Economics By Soares, Rodrigo R.
  10. Top Team Diversity and Business Performance: Latent Class Analysis for Firms and Cities By Nathan, Max
  11. Women, Family and Training: Is it too late for learning? By Bampasidou, Maria
  12. Global competition for attracting talents and the world economy By Frédéric DOCQUIER; Joël MACHADO
  13. On the misery of losing self-employment By Hetschko, Clemens

  1. By: Hentschel, Sandra (University of Bielefeld); Muehlheusser, Gerd (University of Hamburg); Sliwka, Dirk (University of Cologne)
    Abstract: We study the impact of managers on the success of professional soccer teams using data from the German "Bundesliga". We evaluate the performance impact of individual managers by estimating regression models that include both team and manager fixed effects, where we are exploiting the high turnover of managers between teams to disentangle the managers' contributions. We find that teams employing a manager at the 75% ability percentile gain on average 0:25 points per game more than those employing a manager at the 25% ability percentile, which corresponds to a sizeable difference of 18% of the average number of points awarded per game. Moreover, estimated abilities have significant predictive power for future performance.
    Keywords: managerial skills, human capital, empirical, fixed effects, professional sports
    JEL: J24 J44 J63
    Date: 2014–10
  2. By: Czibor, Eszter (University of Amsterdam); Onderstal, Sander (University of Amsterdam); Sloof, Randolph (University of Amsterdam); van Praag, Mirjam C. (Copenhagen Business School)
    Abstract: The provision of non-pecuniary incentives in education is a topic that has received much scholarly attention lately. Our paper contributes to this discussion by investigating the effectiveness of grade incentives in increasing student performance. We perform a direct comparison of the two most commonly used grading practices: the absolute (i.e., criterion-referenced) and the relative (i.e., norm-referenced) grading schemes in a large-scale field experiment at a university. We hypothesize that relative grading, by creating a rank-order tournament in the classroom, provides stronger incentives for male students than absolute grading. In the full sample, we find weak support for our hypothesis. Among the more motivated students we find evidence that men indeed score significantly higher on the test when graded on a curve. Female students, irrespective of their motivation, do not increase their scores under relative grading. Since women slightly outperform men under absolute grading, grading on a curve actually narrows the gender gap in performance.
    Keywords: education, test performance, grade incentives, competition, gender, field experiment
    JEL: I21 I23 A22 D03 C93
    Date: 2014–08
  3. By: Dostie, Benoit (HEC Montreal)
    Abstract: The firm's stock of human capital is an important determinant of its ability to innovate. As such, any increase in this stock through firm-sponsored training might lead to more innovation. We test this hypothesis using detailed data on firms' human capital investments and innovation performance, the Canadian longitudinal linked employer-employee data from 1999-2006. Our results, with workplace fixed-effects and allowing for time-varying productivity shocks, demonstrate that more training leads to more product and process innovation, with on-the-job training playing a role that is as important as classroom training. We then demonstrate that on-the-job training has a positive impact on firm-level productivity through improved process innovation.
    Keywords: innovation, firm-sponsored training, productivity, linked employer-employee data
    JEL: J24 L22 M53 O32
    Date: 2014–09
  4. By: Chaparro, Juan; Lora, Eduardo
    Abstract: Based on Akerlof and Kranton (2005), who argue that group identity and social norms influence individual preferences towards work effort, a model is developed to understand why firms create good job conditions, taking into account the cost of implementing them and their impact on wages and productivity. Then, using individual-level data from the Gallup World Poll for 18 Latin American countries, the main predictions of the model are tested using propensity score matching. We find a positive link between good job conditions, workers’ labor income and productivity when there are several simultaneous signals of a good work environment. We conclude that there is a positive payoff of investing in good job conditions for both workers and firms.
    Keywords: Job Conditions, Human Resources Management, Labor Productivity, Identity Economics, Propensity Score Matching, Latin America, International Development, Labor and Human Capital, Productivity Analysis, J24, J64, M12, M54, O54,
    Date: 2014
  5. By: Bannier, Christina E.; Feess, Eberhard; Packham, Natalie
    Abstract: This paper examines the effect of imperfect labor market competition on the efficiency of compensation schemes in a setting with moral hazard, private information and risk-averse agents. Two vertically differentiated firms compete for agents by offering contracts with fixed and variable payments. Vertical differentiation between firms leads to endogenous, type-dependent exit options for agents. In contrast to screening models with perfect competition, we find that existence of equilibria does not depend on whether the least-cost separating allocation is interim efficient. Rather, vertical differentiation allows the inferior firm to offer (cross-)subsidizing fixed payments even above the interim efficient level. We further show that the efficiency of variable pay depends on the degree of competition for agents: For small degrees of competition, low-ability agents are under-incentivized and exert too little effort. For large degrees of competition, high-ability agents are over-incentivized and bear too much risk. For intermediate degrees of competition, however, contracts are second-best despite private information.
    Keywords: Incentive compensation,screening,imperfect labor market competition,vertical differentiation,cross-subsidy
    JEL: D82 D86 J31 J33
    Date: 2014
  6. By: Felipe Balmaceda (Facultad de Economía y Empresa, Universidad Diego Portales); Santiago Balseiro (The Fuqua School of Business, Duke University); Jose Correa (Departamento de Ingenieria Industrial, Universidad de Chile); Nicolas Stier-Moses (Columbia School of Business, Columbia University)
    Abstract: This article studies a principal-agent problem with discrete outcome and effort level spaces. The principal and the agent are risk neutral and the latter is subject to limited liability. We consider the ratio between the first-best social welfare to the social welfare arising from the principal’s optimal pay-for-performance contract, i.e., the welfare loss. In the presence of moral hazard, we provide simple parametric bounds on the welfare loss of a given instance, and then study the worst-case welfare loss among all instances with a fixed number of effort and outcome levels. Key parameters to these bounds are the number of possible effort levels, the likelihood ratio evaluated at the highest outcome, and the ratio between costs of the highest and the lowest effort levels. As extensions, we also look at linear contracts and at cases with multiple identical tasks. Our work constitutes an initial effort to analyze losses arising from moral hazard problems when the agent is subject to limited liability, and shows that these losses can be costly in the worst case.
    Date: 2014–09
  7. By: Martin Huber; Michael Lechner; Conny Wunsch (University of Basel)
    Abstract: <p style="margin-bottom:12.0pt; line-height:150%"><span lang="EN-GB">This paper investigates the average effects of (firm-provided) workplace health promotion measures in form of the analysis of sickness absenteeism and </span><span lang="EN-GB">health circles/courses</span><span lang="EN-GB"> on labour market out­comes of the firms’ employees. Exploiting linked employer-employee panel data that consist of rich survey-based and administrative information on firms, workers and regions, we apply a flexible propensity score matching approach that controls for selection on observables as well as on time-constant unob­served fac­tors. While the effects of analysing sickness absenteeism appear to be rather limited, our results suggest that health circles/courses increase tenure and </span><span lang="EN-GB">decrease the number of job changes across various age groups. A key finding is that </span><span lang="EN-GB">health circles/courses</span><span lang="EN-GB"> strengthen the labour force attachment of elderly em­ployees (51-60), implying potential cost savings for public transfer schemes such as unemployment or early retirement benefits.  </span>
    Keywords: Firm health policies, health circles, health courses, analysis of sickness absenteeism, matching
    JEL: I10 I19 J32
    Date: 2014
  8. By: Richey, Jeremiah; Rosburg, Alicia
    Abstract: Using data from the 1979 and 1997 National Longitudinal Survey of Youth, we investigate the changing roles of ability and education in the transmission of economic status across generations. Potential changes are identified using a decomposition method based on the OLS omitted variable bias formula. We find that ability plays a substantially diminished role for the most recent cohort while education plays a substantially larger role. The first finding results from a smaller effect of children's ability on status and a reduced correlation between parental status and children's ability. The second finding results mainly from increased returns to higher education.
    Keywords: Intergenerational mobility, Education, Ability
    JEL: I24 J62
    Date: 2014–11–15
  9. By: Soares, Rodrigo R. (Sao Paulo School of Economics)
    Abstract: This short essay reviews Gary Becker's contributions and influence in health economics. It was originally prepared for the collection of short papers in honor of Gary Becker that is scheduled to appear in the inaugural issue of the Journal of Demographic Economics.
    Keywords: Gary Becker, health, human capital
    JEL: I1 J1
    Date: 2014–10
  10. By: Nathan, Max (London School of Economics)
    Abstract: A growing number of studies find linkages between workforce diversity and business performance, but key aspects of this relationship remain unclear. First, within the firm, the role of 'top team' demography on firm outcomes is surprisingly little understood. Second, urban location may amplify firm-level processes, but almost no studies test these firm-area interactions. I deploy English cross-sectional data to explore these issues, using latent class analysis to tackle firm-level heterogeneity. I find evidence of positive links in some firm classes, both linear and non-linear, and suggestive evidence that ethnic top team diversity is amplified in the London city-region.
    Keywords: firm-level analysis, business performance, diversity, ethnicity, gender, cities
    JEL: J15 L21 R23
    Date: 2014–09
  11. By: Bampasidou, Maria
    Keywords: Causal inference, treatment effects, gender analysis, Job Corps, Training programs, Labor and Human Capital, Research Methods/ Statistical Methods, C14, I20, J01,
    Date: 2014
  12. By: Frédéric DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS); Joël MACHADO (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: This paper studies the effect of liberalizing the international mobility of college-educated workers on the world economy. First, we combine data on effective and desired migration to identify the net pool of foreign talents (NPFT) of selected high-income countries. So far, the EU15 has poorly benefited from its NPFT while the US has mobilized a large portion of it. Second, we use a micro-founded model to simulate the effects of skill-selective liberalization shocks. In our benchmark model, a worldwide liberalization induces larger long-run income gains for the EU15 (+8.8 percent) than for the US (+5.9 percent). However, less attractive EU countries such as Austria, Belgium, Germany, Greece, Luxembourg and the Netherlands benefit less than the US. In addition, liberalizing high-skilled migration decreases income per worker by 2.5 percent in developing countries. Overall, it increases efficiency (+6.2 percent in the worldwide average level of income per capita) and inequality (+1.2 percentage points in the Theil inequality index). Much greater effects can be obtained if total factor productivity varies with human capital.
    Keywords: brain drain, human capital, migration, growth,inequality
    JEL: O15 F22 I24
    Date: 2014–11–07
  13. By: Hetschko, Clemens
    Abstract: German panel data is used to show that the decrease in life satisfaction caused by an increase in the probability of losing work is higher when self-employed than when paid employed. Further estimations reveal that becoming unemployed reduces self-employed workers´ satisfaction considerably more than salaried workers´ satisfaction. These results indicate that losing self-employment is an even more harmful life event than losing dependent employment. Monetary and non-monetary reasons seem to account for the difference between the two types of work. Moreover, it originates from the process of losing self-employment and the consequences of unemployment rather than from advantages of self-employment.
    Keywords: life satisfaction,self-employment,probability of losing work,unemployment
    JEL: I31 J24 J65 L26
    Date: 2014

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