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on Human Capital and Human Resource Management |
| By: | Matthias Efing; Harald Hau; Patrick Kampkötter; Johannes Steinbrecher |
| Abstract: | We use payroll data on 1.2 million bank employee years in the Austrian, German, and Swiss banking sector to identify incentive pay in the critical banking segments of treasury/capital market management and investment banking for 66 banks. We document an economically significant correlation of incentive pay with both the level and volatility of bank trading income-particularly for the pre-crisis period 2003--7 for which incentive pay was strongest. This result is robust if we instrument the bonus share in the capital markets divisions with the strength of incentive pay in unrelated bank divisions like retail banking. Moreover, pre-crisis incentive pay appears too strong for an optimal trade-off between trading income and risk which maximizes the NPV of trading income. |
| JEL: | D22 G01 G20 G21 G38 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20468&r=hrm |
| By: | Tonin, Mirco (University of Southampton); Wahba, Jackline (University of Southampton) |
| Abstract: | In many countries there is a considerable gender gap in enrolment for a bachelor's degree in Economics, arguably an important stepping stone towards positions of influence in policy making and occupations paying relatively high wages. We investigate the sources of this gap by looking in detail at the university admission process in the UK. We use a 50 percent random sample of administrative data covering all university applications in 2008 and find no evidence of universities discriminating against female applicants. What we find is that girls are less likely to apply for a bachelor's degree in Economics to start with, even if once they apply their likelihood of enroling is the same as for boys. Girls are less likely to study Maths in high school and this may deter them from applying to study Economics at the university level. However, even among those who have studied Maths, females are less likely to apply than males, suggesting that differences in the choice of A level subjects cannot explain the whole gap. |
| Keywords: | economics, gender, discrimination, education, pay gap |
| JEL: | I21 I23 I28 J24 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8414&r=hrm |
| By: | Bryson, Alex (National Institute of Economic and Social Research (NIESR)); Freeman, Richard B. (Harvard University) |
| Abstract: | Many large listed firms offer workers the opportunity to buy shares in the firm at discounted rates through employee stock purchase plans (ESPP). The discounted rate creates a gift exchange, where the firm hopes that workers who accept the gift reciprocate with greater loyalty and effort. But ESPPs diverge from standard gift exchange or efficiency wage models. Employees have to invest some of their own money by purchasing shares at the discounted rate to accept the gift. A sizeable number choose to reject the gift. In addition, the value of the ESPP gift varies with the share price and thus with the performance of the firm and the effort of workers in total. For workers who buy subsidized shares, an ESPP sets up a group incentive pay system analogous to profit sharing, all-employee stock options, or an employment ownership scheme that makes part of workers' compensation depend on company performance. Using data from the UK establishments of a multinational firm that places its ESPP at the heart of its employee compensation system, we compare the workplace behaviour of employees who join the ESPP with that of observationally equivalent workers who do not join the plan. We find that workers who purchase shares at subsidized prices work harder for longer hours and have lower quit and absence rates than workers who do not join the plan, but are no more involved in co-monitoring the performance of fellow employees than non-Plan members. We also find perceptions of peers' Plan participation influences workers' behaviour. ESPP joiners socialise more with colleagues outside work: this greater sense of social identity with colleagues, predicted under some gift exchange models, lowers their costs of work effort and may explain why they are more productive than those who do not join the ESPP. These findings highlight the distinct place of subsidized share purchase schemes in the spectrum of gift exchange and group incentive pay systems. |
| Keywords: | share ownership, job search, quits, sickness absence, effort, gift exchange, incentives |
| JEL: | J24 J33 J54 J63 M52 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8537&r=hrm |
| By: | Cuñat, Vicente (London School of Economics); Giné, Mireia (Wharton School, University of Pennsylvania); Guadalupe, Maria (INSEAD) |
| Abstract: | This paper estimates the effects of Say-on-Pay (SoP); a policy that increases shareholder "voice" by providing shareholders with a regular vote on executive pay. We apply a regression discontinuity design to the votes on shareholder-sponsored SoP proposals. Adopting SoP leads to large increases in market value (4%) and to improvements in long-term performance: profitability and labor productivity increase, while overheads and investment fall. In contrast, we find limited effects on pay levels and structure. This suggests that SoP serves as a regular vote of confidence on the CEO, which leads to higher efficiency and market value. |
| Keywords: | say-on-pay, corporate governance, executive compensation |
| JEL: | G34 M52 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8538&r=hrm |
| By: | Monica Galizzi; Roberto Leombruni; Lia Pacelli; Antonella Bena |
| Abstract: | This is the first analysis of determinants of the return to work of injured workers in an institutional setting where workers earnings are fully compensated during the disability spell. Employers carry the costs associated to the time off work; hence they could face an incentive to put pressure on workers to shorten their leave. We use a matched employer-employees panel data merged with Italian workers compensation records. We find that even when we control for measures of commitment and job security, workers with high wages and high relative wages (who are more costly for the employer) return to work sooner. |
| Keywords: | Return to Work; Injury; Workers’ Compensation; Relative wages; Commitment; Hazard models |
| JEL: | J22 J28 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:139&r=hrm |
| By: | Felipe Balmaceda (Facultad de Economía y Empresa, Universidad Diego Portales) |
| Abstract: | This paper studies optimal task assignments in a risk neutral principal-agent model in which agents are compensated according to an aggregated performance measure. The main trade-off involved is one in which specialization allows the implementation of any possible effort profile, while multitasking constraint the set of implementable effort profiles. Yet, the implementation of any effort profile in this set is less expensive than that under specialization. The principal prefers multitasking to specialization except when tasks are complements and the output after success is small enough so that it is not second-best optimal to implement high effort in each task. This result is robust to several extensions such as the existence of multiple performance measures. |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ptl:wpaper:54&r=hrm |
| By: | Jano, Pilar; Hueth, Brent |
| Abstract: | This paper investigates the presence of career incentives in arm's-length contracts between wine-grape farmers and wineries in Chile. We observe explicit incentives in pay-for-performance provisions that depend on measurable characteristics of grape quality, and we test for the presence of complementary implicit incentives that arise from competition in the market for contract farmers. In addition to the traditional use of long-term contracts as ex ante protection against potential future hold-up, we hypothesize that long-term contracts represent the final stage in the farmers' "careers" after a series of short-term contracts. We develop a model of career concerns that incorporates investment in training by wineries and find conditions under which long-term contracts are preferred to short-term contracts. We find that contracts in the Chilean wine-grape market are structured like a ladder and that career incentives are important in a setting which uses long-term contracts for high-quality provision. In general, farmers that have invested in high-quality production, and those that are more able, educated, and experienced can access long-term contracts. |
| Keywords: | careers, incentives, quality, contracts, wine-grapes, Agribusiness, Agricultural and Food Policy, Industrial Organization, International Development, Labor and Human Capital, |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170613&r=hrm |
| By: | Possenriede, Daniel (Utrecht School of Economics); Plantenga, Janneke (Utrecht University) |
| Abstract: | In this paper we analyse the effects of arrangements that provide temporal and locational flexibility of work (TLF), namely flexi-time, telehomework, and part-time work, on employees' satisfaction with the fit between working time and private life and their overall job satisfaction. TLF arrangements provide employees with more control over their working life and therefore are likely to improve on the match between paid work and private life. Based on Dutch household panel data, the results show that TLF arrangements, flexi-time in particular, are generally associated with sizeable increases in satisfaction with working-time fit and overall job satisfaction. Somewhat surprisingly, the effects hardly differ between male and female employees and between employees with and without children. Temporal and locational flexibility apparently appeals not only to employees with family responsibilities but more general to all employees. |
| Keywords: | flexi-time, job satisfaction, locational flexibility, part-time work, telehomework, temporal flexibility, working-time fit |
| JEL: | J22 J28 M52 M54 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8436&r=hrm |
| By: | Ghazala Azmat (Queen Mary University of London and CEP (LSE)); Barbara Petrongolo (Queen Mary University of London and CEP (LSE)) |
| Abstract: | We discuss the contribution of the experimental literature to the understanding of both traditional and previously unexplored dimensions of gender differences and discuss their bearings on labor market outcomes. Experiments have offered new findings on gender discrimination, and while they have identified a bias against hiring women in some labor market segments, the discrimination detected in field experiments is less pervasive than that implied by the regression approach. Experiments have also offered new insights into gender differences in preferences: women appear to gain less from negotiation, have lower preferences than men for risk and competition, and may be more sensitive to social cues. These gender differences in preferences also have implications in group settings, whereby the gender composition of a group affects team decisions and performance. Most of the evidence on gender traits comes from the lab, and key open questions remain as to the source of gender preferences -nature versus nurture, or their interaction- and their role, if any, in the workplace. |
| Keywords: | Gender, Field experiments, Lab experiments, Discrimination, Gender preferences |
| JEL: | J16 J24 J71 C91 C92 C93 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp724&r=hrm |
| By: | Marconi G.; Grip A. de (GSBE) |
| Abstract: | In this paper, we develop a general equilibrium overlapping generations model which is based on the view that education makes workers more productive by increasing their ability to learn from work experience, rather than providing skills that directly increase productivity. This assumption is discussed and compared with the dominant Mincerian view on the education-productivity relationship. One important implication of the model is that the enrolment rate to education has a negative effect on the GDP in the medium term and a positive effect in the long term. This could be an explanation for the weak empirical relationship between education and economic growth that has been found in the empirical macroeconomic literature. Conversely, for a given enrolment rate, the quality of education, as measured by work |
| Keywords: | Human Capital; Skills; Occupational Choice; Labor Productivity; Macroeconomic Analyses of Economic Development; One, Two, and Multisector Growth Models; |
| JEL: | J24 O11 O41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2014032&r=hrm |
| By: | Hamermesh, Daniel S. (University of Texas at Austin, Royal Holloway); Stancanelli, Elena G. F. (CNRS, Sorbonne Economics Research Center (CES)) |
| Abstract: | American workweeks are long compared to other rich countries'. Much less well-known is that Americans are more likely to work at night and on weekends. We examine the relationship between these two phenomena using the American Time Use Survey and time-diary data from 5 other countries. Adjusting for demographic differences, Americans' incidence of night and weekend work would drop by about 10 percent if European workweeks prevailed. Even if no Americans worked long hours, the incidence of unusual work times in the U.S. would far exceed those in continental Europe. |
| Keywords: | night work, weekend work, shorter hours |
| JEL: | J22 J08 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8423&r=hrm |
| By: | Westéus, Morgan (Department of Economics, Umeå School of Business and Economics); Raattamaa, Tomas (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | This paper adds to the theoretical literature on the incentives of Temporary Work Agencies (TWAs). Using a principal-agent model with hidden action to analyse two main types of contracts between a TWA and a Client Firm (CF), the TWA is shown to potentially act against the best interest of the CF when helping to fill a vacant position. The results also suggest that the adverse effect of the incentive misalignment is larger when workers are leased rather than hired by the CF. However, this effect could potentially be offset by introducing a sufficient level of competition among TWAs. |
| Keywords: | Temporary work agency; client firm; incentives; matching; contracts |
| JEL: | J41 J44 J64 |
| Date: | 2014–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0896&r=hrm |
| By: | Maria Donovan Fitzpatrick |
| Abstract: | Public sector employees receive large fractions of their lifetime income in the form of deferred compensation. The introduction of the opportunity provided to Illinois public school employees to purchase additional pension benefits allows me to estimate employees' willingness-to-pay for benefits relative to the cost of providing them. The results show employees are willing to pay 20 cents on average for a dollar increase in the present value of expected retirement benefits. The findings suggest substantial inefficiency in compensation and cast doubt on the ability of deferred compensation schemes to attract employees. |
| JEL: | H55 H72 H75 I22 J26 J45 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20582&r=hrm |
| By: | Ali Fakih |
| Abstract: | This paper provides new evidence on the determinants of vacation leave and its relationship to hours worked and hourly wages by examining the case of Canada. Previous studies from the US, using individual level data, have revealed that annual work hours fall by around 53 hours for each additional week of vacation used. Exploiting a linked employer-employee dataset that allows to control for detailed observed demographic, job, and firm characteristics, we find instead that annual hours of work fall by only 29 hours for each additional week of vacation used. Our findings support the hypothesis that pressure at work may lead employees to use more vacation days, but also causes them to work for longer hours. <P> |
| Keywords: | Paid Vacation Leave, Used Vacation Leave, Work Hours, Wages, Linked Employer-Employee Data, |
| JEL: | J22 M52 |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-40&r=hrm |
| By: | Chen, Wen |
| Keywords: | Financial Economics, Labor and Human Capital, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169066&r=hrm |
| By: | Di Liberto, Adriana (University of Cagliari); Schivardi, Fabiano (Bocconi University); Sulis, Giovanni (University of Cagliari) |
| Abstract: | We study the effects of managerial practices in schools on students' outcomes. We measure managerial practices using the World Management Survey, a methodology that enables us to construct robust measures of management quality comparable across countries. We find substantial heterogeneity in managerial practices across six industrialized countries, with more centralized systems (Italy and Germany) lagging behind the more autonomous ones (Canada, Sweden, the UK, the US). For Italy, we are able to match organizational practices at the school level with students' outcomes in a math standardized test. We find that managerial practices are positively related to students' outcomes. The estimates imply that if Italy had the same managerial practices as the UK (the best performer), it would close the gap in the math OECD-PISA test with respect to the OECD average. We argue that our results are robust to selection issues and show that they are confirmed by a set of IV estimates and by a large number of robustness checks. Overall, our results suggest that policies directed at improving students' cognitive achievements should take into account principals' selection and training in terms of managerial capabilities. |
| Keywords: | management, productivity, school principals, cognitive skills |
| JEL: | L2 I2 M1 O32 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8475&r=hrm |
| By: | Olapade, Markus; Froelich, Markus; Vargas Hill, Ruth; Maruyama, Eduardo |
| Keywords: | Industrial Organization, Labor and Human Capital, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170228&r=hrm |
| By: | David J. Deming; Noam Yuchtman; Amira Abulafi; Claudia Goldin; Lawrence F. Katz |
| Abstract: | We study employers' perceptions of postsecondary degrees using a field experiment. We randomly assign the sector and selectivity of institution to fictitious resumes and send them to real vacancy postings on a large online job board. According to our results, a bachelor's degree in business from a for-profit "online" institution is 22 percent less likely to receive a callback than a similar degree from a non-selective public institution. Degrees from selective public institutions are relatively more likely to receive callbacks from employers posting higher-salaried jobs, suggesting that employers value college quality and the likelihood of a successful match when contacting applicants. |
| JEL: | I21 J24 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20528&r=hrm |
| By: | Fouarge D.; Kriechel B.; Dohmen T.J. (ROA) |
| Abstract: | We relate risk attitudes and patience of young graduates from high-school, collegeand university, measured around the time that they start their labor market career in a large representative survey, to the riskiness and timing of earnings in the occupations they choose to work in. We find a systematic positive and significant relation between willingness to take risks and measures of occupational earnings risks and employment risk that we derive from a large administrative data set. Patient individuals are significantly more likely to choose for occupations with a steep earnings profile. Individuals whose economic preferences are not well aligned with the riskiness and timing of earnings in their initial occupation are more likely to change to an occupation that better matches their economic preferences. |
| Keywords: | Microeconomic Behavior: Underlying Principles; Human Capital; Skills; Occupational Choice; Labor Productivity; Wage Level and Structure; Wage Differentials; |
| JEL: | J24 J31 D01 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2014009&r=hrm |
| By: | Camp, Kevin; Waldorf, Brigitte |
| Abstract: | This study aims to resolve the question of whether spatial flexibility, i.e. migration to a different labor market, gives rise to improved labor market outcomes among young college-educated individuals in the United States. Young graduates looking to improve their labor market performance may elect to search for jobs at a national, as opposed to a local, level. Using pooled cross-sectional data from the Current Population Survey’s March Supplements, we analyze the unemployment durations of young college graduates in the contexts of both spatial flexibility and the recent global recession. Results of Kaplan-Meier survival analysis suggest significant differences in unemployment duration for spatially flexible individuals, relative to the inflexible. Further, Cox proportional hazard modeling reveals differing effects in the presence of demographic and locational covariates. These results suggest a role for spatial flexibility in improving labor market outcomes among college graduates in their early careers. |
| Keywords: | Labor Economics, Unemployment Duration, Spatial Flexibility, Community/Rural/Urban Development, Labor and Human Capital, J64, J11, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170678&r=hrm |
| By: | Böheim, René (University of Linz); Horvath, Thomas (WIFO - Austrian Institute of Economic Research); Mayr, Karin (University of Vienna) |
| Abstract: | We determine workforce composition and wages in firms in the presence of productivity spill-overs between co-workers. In equilibrium, workers' wages depend on the production structure of firms, own group size, and aggregate workforce composition in the firm. We estimate the wage effects of workforce diversity and own group size by birthplace and the implied production structure in Austrian firms using a comprehensive matched employer-employee data set. In our data, we identify a positive effect of workforce diversity and a negative effect of own group size on wages, which suggest that workers of different birthplaces are complements in production on average. |
| Keywords: | workforce composition, productivity spill-overs, worker group size |
| JEL: | D21 D22 F22 J31 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8463&r=hrm |
| By: | Waddell, Glen R. (University of Oregon); Lee, Logan M. (University of Oregon) |
| Abstract: | We model a hiring process in which the candidate is evaluated sequentially by two agents of the firm who each observe an independent signal of the candidate's productivity. We introduce the potential for taste-based discrimination and characterize how one agent's private valuation of the candidate influences the other agent's hiring practices. This influence is often in an offsetting direction and is partially corrective. Yet, this offsetting response can also be large enough that even a high-productivity candidate who is privately favoured by one agent, as may be the case in efforts to increase gender or racial diversity, is less likely to be hired even when the other agent has no preference over private, non-productive attributes. |
| Keywords: | hiring, race, gender, diversity, discrimination |
| JEL: | J1 J7 D8 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8445&r=hrm |
| By: | Vetter, Henrik |
| Abstract: | The author analyses delegation in homogenous duopoly under the assumption that the firm-managers compete in supply functions. In supply function equilibrium, managers' decisions are strategic complements. This reverses earlier findings in that the author finds that owners give managers incentives to act in an accommodating way. As a result, optimal delegation reduces per-firm output and increases profits to above-Cournot profits. Moreover, in supply function equilibrium the mode of competition is endogenous. This means that the author avoids results that are sensitive with respect to assuming either Cournot or Bertrand competition. |
| Keywords: | Delegation,incentives,supply function equilibrium |
| JEL: | D22 D43 L22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201438&r=hrm |
| By: | Charles Henri DiMaria; Chiara Peroni; Francesco Sarracino |
| Abstract: | This article is about the link between people’s subjective well-being, defined as an evaluation of one’s own life, and productivity. Our aim is to test the hypothesis that subjective well-being contributes to productivity using a two step approach: first, we establish whether subjectivewell-being can be a candidate variable to study Total Factor Productivity; second, we assess how much subjective well-being contributes to productivity at aggregate level through efficiency gains. We adopt Data Envelopment Analysis to compute total factor productivity and efficiency indices using European Social Survey and AMECO data for 20 European countries. Results show that subjective well-being is an input and not an output to production. |
| Keywords: | productivity, subjective well-being, TFP, efficiency gains, life satisfaction, economic growth, DEA. |
| JEL: | E23 I31 O47 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:699&r=hrm |