nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒01‒26
fifteen papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. Lifecycle Human Capital Accumulation Across Countries: Lessons From U.S. Immigrants By Tommaso Porzio; Todd Schoellman; Nancy Qian; Benjamin Moll; David Lagakos
  2. Gender earnings differentials and pay structure of Italian family managers By Damiani, Mirella; Ricci, Andrea
  3. The gap between the conditional wage distributions of incumbents and the newly hired employees: decomposition and uniform ordering By Maasoumi, Esfandiar; Pitts, M. Melinda; Wu, Ke
  4. Intangible assets and firm-level productivity By Crass, Dirk; Peters, Bettina
  5. Quality Versus Quantity in Information Transmission: Theory and Experimental Evidence By Alistair Wilson; Jonathan Lafky
  6. Trust and trustworthiness in experimental organizations By Giuseppe Danese; Luigi Mittone
  7. An envelope approach to tournament design By Christian Ewerhart
  8. Public sector size and performance management : a case-study of post-revolution Tunisia By Brockmeyer, Anne; Khatrouch, Maha; Raballand, Gael
  9. “Human development and tourism specialization. Evidence from a panel of developed and developing countries” By Bianca Biagi; Maria Gabriela Ladu; Vicente Royuela
  10. Understanding job satisfaction in a labor intensive sector: Empirical evidence from the Ethiopian cut flower industry By Staelens, Lotte; Louche, Céline; D’Haese, Marijke
  11. Well-Paid Nurses are Good Nurses: An Analysis of Nursing Supply Based on Determinants of Work Motivation By Alessandro Fedele
  12. The Firm Size Effect On Performance Due To Intangible Resources By Mariia A. Molodchik; Carlos Jardon; Angel Barajas
  13. Organizational Citizenship Behaviors in Small and Medium Enterprises in the Context of Leadership Behavior By Kararti, Tuncay; Yuksekbilgili, Zeki
  14. Physician Payment Contracts In The Presence Of Moral Hazard And Adverse Selection: Theory And Application To Ontario By Jasmin Kantarevic; Boris Kralj
  15. On Self Selection of the Corrupt into the Public Sector By Ritwik Banerjee; Tushi Bau; Tanya Rosenblat

  1. By: Tommaso Porzio (Yale University); Todd Schoellman (Arizona State University); Nancy Qian (Yale University); Benjamin Moll (Princeton University); David Lagakos (University of California, San Diego)
    Abstract: Does lifecycle human capital accumulation vary across countries? If so, why? This paper seeks to answer these questions by studying U.S. immigrants, who come from a wide variety of countries but work in a common labor market. We document that returns to potential experience among U.S. immigrants are higher on average for workers coming from rich countries than for those coming from poor countries. To understand this fact we build a Ben-Porath model of lifecycle human capital accumulation that features three potential theories, working respectively through cross-country differences in: selection, skill loss, and human capital accumulation. To distinguish between theories, we use new data on the characteristics of immigrants and non-migrants in a large set of countries. We conclude that the most likely theory is that immigrants from poor countries accumulate relatively less human capital in their home countries before migrating. Our data suggest that lower quality schooling in poor countries may be the proximate cause of their workers’ lower lifecycle human capital accumulation.
    Date: 2014
  2. By: Damiani, Mirella; Ricci, Andrea
    Abstract: This paper analyses a dimension of the gender pay gap that has received so far a limited attention and that concerns not the level but the form of pay. The econometric analysis we performed has considered a fairly homogenous type of occupation represented by family management and with a great bargaining power in setting their rewards. With this strategy we aim at estimating gender disparities not driven by sex segregation by positions in firm hierarchy, but disparities more likely linked to preferences and identity. Probit models have been estimated to test whether or not the difference between women and men in pay structure of family managers (fixed salary or variable earnings) is statistically significant. We obtain that the female presence in top executive jobs, even after controlling for a large set of firm and workplace characteristics, is associated with a substantial lower incidence of the variable payment component. These gender differences in the structure of compensation packages are confirmed by IV Probit estimates that address potential omitted variables and endogeneity biases. We conclude that human capital factors, sectoral segregation or differences between firms are not the only drivers of gender differentials in the form of pay. We also suggest that lower representation of women in variable earning schemes might be an indicator of their minor attitudes toward competition.
    Keywords: Compensation packages; Economics of Gender
    JEL: J16 J33
    Date: 2015–01–12
  3. By: Maasoumi, Esfandiar (Emory University); Pitts, M. Melinda (Federal Reserve Bank of Atlanta); Wu, Ke (Emory University)
    Abstract: We examine the cardinal gap between wage distributions of the incumbents and newly hired workers based on entropic distances that are well-defined welfare theoretic measures. Decomposition of several effects is achieved by identifying several counterfactual distributions of different groups. These go beyond the usual Oaxaca-Blinder decompositions at the (linear) conditional means. Much like quantiles, these entropic distances are well defined inferential objects and functions whose statistical properties have recently been developed. Going beyond these strong rankings and distances, we consider weak uniform ranking of these wage outcomes based on statistical tests for stochastic dominance. We focus the empirical analysis on employees with at least 35 hours of work in the 1996–2012 monthly Current Population Survey. Among other findings, we find incumbent workers enjoy a better distribution of wages, but the attribution of the gap to wage inequality and human capital characteristics varies between quantiles. For instance, highly paid new workers are mainly due to human capital components and, in some years, even better wage structure.
    Keywords: wage gap; metric entropy distance; stochastic dominance; wage distributions; counterfactual analysis; human capital; inequality; labor markets
    JEL: C43 I31
    Date: 2014–11–01
  4. By: Crass, Dirk; Peters, Bettina
    Abstract: Firms invest huge amounts into intangible assets. This paper explores to which extent different kinds of intangible assets are conducive to firm-level productivity. Our study contributes to the literature by simultaneously comparing productivity effects of innovative capital, human capital, branding capital and organizational capital and testing whether complementarity or substitutability exists between different intangible assets. Using panel data for the period 2006-2010, our econometric estimates confirm strong positive productivity effects of human capital and branding capital. Results for innovative capital are found to be mixed. While R&D has a strong positive impact on productivity, design & licences and patents show only weak productivity enhancing effects. The same holds for organizational capital. We furthermore detect several complementarities among different kind of intangible assets. Our results are robust to various parametric (OLS, FE) and non-parametric (Olley and Pakes, Levinsohn and Petrin) productivity estimation methods.
    Keywords: Intangible capital,productivity,R&D,marketing,firm-specific human capital,organizational capital,patents,trademarks
    JEL: O33 C23 J24 L22
    Date: 2014
  5. By: Alistair Wilson; Jonathan Lafky
    Abstract: Information sharing has become increasingly important in helping consumers make better, more informed choices over competing products. Our project uses a novel theoretical framework and laboratory experiments to analyze three simple, commonly used incentive schemes against an unincentivized baseline. Each incentive scheme has qualitatively different theoretical predictions for behavior and efficiency, while our laboratory experiments examine the degree to which these differences manifest themselves, and the best-cast theory`s robustness to human behavior. Our findings indicate the possibility for substantial efficiency gains by introducing incentives that reward information sharing, even where those incentives drive a wedge between those sending and those receiving information.
    Keywords: Ratings, Information Sharing, Dishonesty, Incentives
    JEL: C71 C92 D82 D83
    Date: 2015–01
  6. By: Giuseppe Danese; Luigi Mittone
    Abstract: In this paper we discuss two instruments through which corporate law attempts to promote trust and trustworthiness in business organizations: (i) monitoring of the manager by a principal, as in the agency approach; (ii) moral suasion, as in the approach according to which managers are “fiduciaries”. We present the results of a laboratory experiment designed to investigate the effectiveness of these two instruments in promoting: (i) profitable, but at the same time risky, entrustments of assets to a manager from a group of investors earning their endowment through real effort; (ii) a higher payback for those investors who entrust more assets to the manager. The first is a measure of trust of the investors in the manager, while the second is a measure of the manager’s trustworthiness. We find that moral suasion increases the investors’ trust. Monitoring also increases the investors’ trust, but only in the case in which the manager is not aware of the experimental identity of his/her principal. The manager is trustworthy up to a certain degree, regardless of the governance structure of the organization and of the accuracy with which she observes each investor’s entrustment. Finally, we find a modest positive effect of noise on trust, but no strong effect of noise on effort or trustworthiness.
    JEL: K22 C92 L21
    Date: 2015
  7. By: Christian Ewerhart
    Abstract: Optimal rank-order tournaments have traditionally been studied using a first-order approach. The present analysis relies instead on the construction of an "upper envelope" over all incentive compatibility conditions. lt turns out that the first-order approach is not innocuous. For example, in contrast to the traditional understanding, tournaments may be dominated by piece rates even if workers are risk-neutral. The paper also offers a strikingly simple characterization of the optimal tournament for quadratic costs and CARA utility, as well as an extension to large tournaments.
    Keywords: Rank-order tournaments, first-order approach, envelope theorem
    JEL: C62 D86 L23
    Date: 2014–12
  8. By: Brockmeyer, Anne; Khatrouch, Maha; Raballand, Gael
    Abstract: This paper examines public sector size and performance management in post-revolution Tunisia, drawing on macro-empirical, legal, and qualitative analyses. The paper first shows that public sector employment figures and the wage bill have increased significantly since the 2011 revolution, but that this represents merely an acceleration of the previous trend. The paper then examines de jure and de facto performance management in Tunisia's public sector, covering incentives through recruitment, evaluation, compensation, and promotion. The examination shows that Tunisia's legal framework is well-designed for recruiting the most skilled candidates into the public sector and promoting the most high-performing employees. De facto, the link between an employee's performance and evaluation, compensation, and promotion is weak. Performance evaluation is virtually nonexistent and promotions are automatic or awarded through a process that emphasizes seniority over performance. This is particularly true during the post-revolution period, in which a number of ad-hoc arrangements multiplied divergences between the legal basis for performance management and its application. These ad-hoc changes allowed the state to act as employer of last resort, significantly increasing direct (noncompetitive) recruitment and regularizing temporary staff. The increase in and proliferation of allowances have added to the complexity of the compensation system. In a qualitative review of past reform attempts, the paper demonstrates that reformers had identified the weaknesses of Tunisia's public sector performance system as early as 1989, but failed to achieve major change.
    Keywords: Labor Markets,Public Sector Economics,Labor Management and Relations,Public Sector Management and Reform,Tertiary Education
    Date: 2015–01–01
  9. By: Bianca Biagi (University of Sassari, CRENoS (Cerdeña, Italy)); Maria Gabriela Ladu (University of Sassari, CRENoS (Cerdeña, Italy)); Vicente Royuela (Department of Econometrics. University of Barcelona)
    Abstract: The analysis of the relationship between tourism and human development points to a positive link between these activities, basically by means of the improvement of economic conditions. In the present study we analyze whether and to what extent this relationship remains positive under different circumstances. We examine a selection of 63 countries from 1996 to 2008 and consider the Human Development Index plus a composite indicator of the tourism market as a whole. Findings confirm that, on average, tourism is positively associated with human development, particularly education (i.e., literacy rate), although the association may be affected by circumstances.
    Keywords: Human Development Index, tourism development, capability approach, externalities JEL classification: 015, 010, D62
    Date: 2015–01
  10. By: Staelens, Lotte; Louche, Céline; D’Haese, Marijke
    Abstract: This paper analyses the determinants of job satisfaction in the cut flower industry in Ethiopia. Using primary survey data of 358 workers and focus groups conducted in 5 similar farms, we find that organizational extrinsic rewards are the main determinants of job satisfaction. Intrinsic and social extrinsic rewards however, appear to have little predictive power. Moreover our findings suggest that there are no gender differences in levels and predictors of job satisfaction, however we do find educational differences and explain why. To end, we discuss the implications of this study along with limitations and suggestions for future research.
    Keywords: job satisfaction, labor, cut flower industry, Ethiopia, Africa, Labor and Human Capital,
    Date: 2014–08
  11. By: Alessandro Fedele (Free University of Bolzano‐Bozen, Faculty of Economics and Management)
    Abstract: Some recent health economics papers suggest that increasing wage in the nursing labor market with the aim of reducing shortage may yield a negative effect on the average productivity and/or the average motivation of applicants attracted. Some feminist economics papers criticize this inefficiency wage result on the grounds that nurses' motivation is modeled in an overly simplistic way. The current paper aims to address this criticism by considering explicitly determinants of work motivation. Relying on introductory concepts from organizational psychology and management literatures, the inefficiency wage result is shown to disappear. A pay raise turns out to have no negative effect both on the average productivity and the average motivation of applicants attracted.
    Keywords: Nurses' wage, nursing shortage, nurses' productivity, nurses' motivation, inefficiency wage result, determinants of work motivation
    JEL: I11 J32 B54
    Date: 2015–01
  12. By: Mariia A. Molodchik (National Research University Higher School of Economics); Carlos Jardon (National Research University Higher School of Economics); Angel Barajas (National Research University Higher School of Economics)
    Abstract: The paper explores the effect of firm size on the relation between intangible resources and companies’ performance (ROA). The authors identify six types of intangibles: human resources and management capabilities, innovation and internal process capabilities and customer loyalty and networking capabilities. The study provides econometric justification using a database of more than 1400 European public companies. The time period for the investigated data covers ten years from 2004 to 2013. A dummy regression analysis was applied for empirical testing. The findings revealed that the size of a company matters with regard to the employment of intangible resources and for a performance based on intangibles
    Keywords: intangibles, performance, SME, large companies, European companies, ROA, dummy regression.
    JEL: O30 F L L60 L63
    Date: 2014
  13. By: Kararti, Tuncay; Yuksekbilgili, Zeki
    Abstract: The purpose of this paper is to find out “What is the effect of different types of leadership behavior on organizational citizenship behavior shown by employees within small and medium enterprises” Past literature research in the field of small and medium enterprises shows that SMEs research is related to the human research management. Most of past research about leadership behavior has been done on large organization. A little level of research about leadership behavior has been done on small and medium level enterprises. The question arises that leadership behavior on large organizational are same as in small and medium enterprises or different. Due to the personal and close relationship, short communication, informality and hierarchy structure cause the leader to behave in different way within small and medium size enterprises. These factors have a different effect by the leader toward their employees which is helpful to motivate the employees to perform beyond the requirement. It is expected that transformational leaders have a strong and positive effect on organizational citizenship behavior shown by employees as transformational leader encourage the employees in order to perform beyond the requirement. It is also expected that contingent rewarding leadership behavior have positive effect on employees to show organizational citizenship behavior because after getting reward upon their performance, they feel more motivated to perform more than the requirement. Management by exception has two categories which are active behavior and passive behavior. It is expected that management by exception active have a positive effect because he works in an active way. He can find mistakes, failure and errors before its effect and try to solve these mistakes, failure and error as soon as possible. It is expected that management by exception passive have negative behavior because passive leader waiting for mistakes, failures and errors. Trust is also an important factor between leadership behavior and employees. It is accepted that some certain degree of trust motive the employees to show organizational citizenship behavior. Next to this it also help the employees to perform beyond the requirement. The data were collected from the past researcher in order to find out results. Past research shows that when firm face serious problems or mistake, errors or any failure leader should be there in order to solve problems, mistakes, failure and error. Leader in small and medium enterprise are required to give the authority to the employees in order to solve problems themselves. Leader should also create certain level of trust which is encouraging the employees to show organizational citizenship behavior. Most of leader in small and medium enterprises do not know about their effect on employees. This research is based on past research. This research make aware the leader, how to influence the employees to show organizational citizenship behavior.
    Keywords: leadership behavior, leadership, leadership in SME
    JEL: M12 M14
    Date: 2014–07–01
  14. By: Jasmin Kantarevic; Boris Kralj
    Abstract: We develop a simple principal–agent model with moral hazard and adverse selection to provide a unified framework for understanding some of the most salient features of the recent physician payment reform in Ontario and its impact on physician behaviour. These features include: (1) physicians can choose a payment contract from a menu that includes an enhanced fee-for-service contract and a blended capitation contract; (2) the capitation rate is higher and the cost-reimbursement rate is lower in the blended capitation contract; (3) physicians sort selectively into the contracts based on their initial productivity; (4) all else equal, physicians in the blended capitation model provide fewer services than physicians in the enhanced fee-for-service model.
    Keywords: physician remuneration, moral hazard, adverse selection, Ontario
    JEL: I10 I12 I18
    Date: 2015
  15. By: Ritwik Banerjee (Department of Economics and Business, Aarhus University, Denmark); Tushi Bau (Department of Economics, New York University, Abu Dhabi); Tanya Rosenblat (School of Information, University of Michigan, USA)
    Abstract: Do corrupt people self select themselves in professions where the scope of corruption is high? We conduct a corruption experiment with private sector job aspirants and aspirants of Indian bureaucracy. The game models embezzlement of resources in which “supervisors” evaluate the performance of “workers” and then pay them. We find that aspirant bureaucrats indulge in more corruption than private sector aspirants but the likelihood of being corrupt is same across two sectors.
    Keywords: Corruption, Experiments, Bureaucracy
    JEL: C91 D73 O12 K42
    Date: 2015–06–01

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