nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒01‒31
eighteen papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. Estimating Management Practice Complementarity between Decentralization and Performance Pay By Bryan Hong ; Lorenz Kueng ; Mu-Jeung Yang
  2. Optimal taxation and debt with uninsurable risks to human capital accumulation By Gottardi, Piero ; Kajii, Atsushi ; Nakajima, Tomoyuki
  3. Workers Compensation Insurance: Incentive Effects of Experience Rating on Work-related Health and Safety By Pascale Lengagne
  4. Exploration for Human Capital: Evidence from the MBA Labor Market By Camelia M. Kuhnen ; Paul Oyer
  5. Quality Versus Quantity in Information Transmission: Theory and Experimental Evidence By ; Jonathan Lafky
  6. Health Capital and Human Capital as Explanations for Health-Related Wage Disparities By Donna Gilleskie Denise Hoffman
  7. Human Capital and Development Accounting: New Evidence from Immigrant Earnings By Todd Schoellman ; Lutz Hendricks
  8. Individual determinants of inventor productivity: Report and preliminary results with evidence from linked human capital and patent data By Frosch, Katharina ; Harhoff, Dietmar ; Hoisl, Karin ; Steinle, Christian ; Zwick, Thomas
  9. Impact of the relationship between managers and the board of directors on economic performance of agricultural cooperatives By Zivkovic, Sanja ; Hudson, Darren
  10. Organization performance and happiness in the context of leadership behavior (case study base on psychological well-beings) By Demircioğlu, Emre
  11. How has Student Performance Evolved Over Time? By OECD
  12. Knowledge, Human Capital and Economic Development: Evidence from the British Industrial Revolution, 1750-1930 By B. Zorina Khan
  13. Idiosyncratic Risk and the Manager By Oliver Levine ; Brent Glover
  14. The involvement of employees in knowledge management in the light of the research results By Janina Stankiewicz ; Marta Moczulska
  15. Incentives and Risks in Relationships Between the Principal and the Agent By Minasyan, Vigen
  16. A Tenure-Clock Problem By Chia-Hui Chen ; Junichiro Ishida
  17. Does Female Management Influence Firm Performance? Evidence from Luxembourg Banks By Reinert, Regina M. ; Weigert, Florian ; Winnefeld, Christoph H.
  18. Incentives, Fairness, and Efficiency in Group Identification By Wonki Jo Cho ; Alejandro Saporiti

  1. By: Bryan Hong ; Lorenz Kueng ; Mu-Jeung Yang
    Abstract: The existence of complementarity across management practices has been proposed as one potential explanation for the persistence of firm-level productivity differences. However, thus far no conclusive population-level tests of the complementary joint adoption of management practices have been conducted. Using unique detailed data on internal organization, occupational composition, and firm performance for a nationally representative sample of firms in the Canadian economy, we exploit regional variation in income tax progression as an instrument for the adoption of performance pay. We find systematic evidence for the complementarity of performance pay and decentralization of decision-making from principals to employees. Furthermore, in response to the adoption of performance pay, we find a concentration of decision-making at the level of managerial employees, as opposed to a general movement towards more decentralization throughout the organization. Finally, we find that adoption of performance pay is related to other types of organizational restructuring, such as greater use of outsourcing, Total Quality Management, re-engineering, and a reduction in the number of layers in the hierarchy.
    JEL: D2 H32 J33 L2 M1 M5
    Date: 2015–01
  2. By: Gottardi, Piero (European University Institute ); Kajii, Atsushi (Kyoto University ); Nakajima, Tomoyuki (Federal Reserve Bank of Atlanta )
    Abstract: We consider an economy where individuals face uninsurable risks to their human capital accumulation and study the problem of determining the optimal level of linear taxes on capital and labor income together with the optimal path of the debt level. We show both analytically and numerically that in the presence of such risks it is beneficial to tax both labor and capital income and to have positive government debt.
    JEL: D52 D60 D90 E20 E62 H21 O40
    Date: 2014–11–01
  3. By: Pascale Lengagne (IRDES Institut de recherche et documentation en économie de la santé )
    Abstract: This article examines Workers Compensation Insurance experience rating premiums setting, a common financial incentive tool existing in several countries. Premiums paid by firms are experience rated, which may encourage them to reduce work-related injuries and disabilities. This article provides a literature review on effects of experience rating on work-related health and safety, and empirical results on the French jurisdiction, using sectorial data from industry and construction sectors in 2005. Results are consistent with the hypothesis that this policy tool is a lever that contributes to improve working conditions and reduce work-related injuries rates.
    Keywords: Workers’ Compensation, experience rating, working conditions, work-related injuries.
    JEL: J28 I13 I18
    Date: 2015–01
  4. By: Camelia M. Kuhnen ; Paul Oyer
    Abstract: We empirically investigate the effect of uncertainty on corporate hiring. Using novel data from the labor market for MBA graduates, we show that uncertainty regarding how well job candidates fit with a firm’s industry hinders hiring, and that firms value probationary work arrangements that provide the option to learn more about potential full-time employees. The detrimental effect of uncertainty on hiring is more pronounced when firms face greater firing and replacement costs, and when they face less direct competition from other similar firms. These results suggest that firms faced with uncertainty use similar considerations when making hiring decisions as when making decisions regarding investment in physical capital.
    JEL: G31 J44 M51
    Date: 2015–01
  5. By: ; 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: Information Sharing, Ratings, Incentives, Honesty
    JEL: C72 C92 D82 D83
    Date: 2015–01
  6. By: Donna Gilleskie Denise Hoffman
    Abstract: We use a dynamic modeling strategy to evaluate two potential avenues through which health differences generate a wage gap: directly through reductions in health capital and indirectly through employment transitions that reduce human capital (specifically, occupation and employer tenure). Our results suggest that male workers with a moderate disability are 23 percent more likely to change occupations or employers than nondisabled men. Compared to those who do not make a transition, workers with a moderate disability who change occupations and employers experience an immediate $0.30 decline in hourly wages on top of a $0.57 decline associated with the disability onset.
    Keywords: Health Capital, Human Capital, Wage Disparities
    JEL: I J
    Date: 2014–09–22
  7. By: Todd Schoellman (Arizona State University ); Lutz Hendricks (UNC Chapel Hill )
    Abstract: This paper constructs quality adjusted labor inputs for 50 countries, disaggregated into 7 school levels. Our estimates of labor qualities are based on the wages of immigrants observed in 11 host countries. Based on these estimated labor inputs, we address two questions. First, we estimate the contribution of human capital to variation in output per worker across countries. We find that labor quality accounts for 12% of this variation, while capital and labor inputs jointly account for 43%. Second, we study the cross-country variation in the relative productivities of skilled and unskilled workers. Since we find little evidence of variation in the relative qualities of skilled versus unskilled workers, we conclude that more educated countries employ more skill biased technologies.
    Date: 2014
  8. By: Frosch, Katharina ; Harhoff, Dietmar ; Hoisl, Karin ; Steinle, Christian ; Zwick, Thomas
    Abstract: This report offers new insights into the drivers of inventor productivity at the individual level. It includes well-known drivers, such as inventor age and education, and controls for inventor team size, and firm/applicant information, as well as period and technology field effects derived from patent data. In addition, it adds inventor characteristics that have been largely neglected in existing studies on inventor productivity, such as the breadth of work experience, divergent thinking skills, cognitive problem-solving skills, the use of knowledge sourced from networks within and outside of the inventors' field of expertise, and personality traits. The empirical model draws on a new dataset that matches information about inventors' human capital, such as creative skills, personality traits, networks, and career biographies (collected with a self-administered survey) with patenting histories for 1932 German inventors between the years 1978 and 2012 for clean technology, nanotechnology, and mechanical elements. Our results indicate that the additional inventor characteristics double the proportion of total variation of productivity explained by individual characteristics. Furthermore, we find differences in the importance of individual characteristics across industries and along the productivity distribution, between more and less productive inventors.
    Date: 2015
  9. By: Zivkovic, Sanja ; Hudson, Darren
    Abstract: Cooperatives operate under a business model that creates unique challenges in financial management, governance, strategy, and communication. There have been a number of efforts to identify challenges, critical issues and success factors for agricultural cooperatives. One of the issues agricultural cooperatives are facing is the relationship between managers and the board of directors. Directors in a cooperative occupy a crucial position between members and hired management. Acting as a group, directors set the objectives for the cooperative and decide what the cooperative will do while the general manager decides how it can best be done, subject to board review. Success of a cooperative mainly depends on good board/ manager relationships. This study was focused on evaluation of impact of the relationship between the board of directors and managers on performance of agricultural cooperatives. That data originated from a mail survey and personal interviews among managers and chairmen of agricultural cooperatives in Texas. The results showed that size of the cooperative had negative impact on performance while more frequent engagement of the managers in strategic planning, higher level of managers’ job satisfaction, and organizational commitment positively affect the profitability of a cooperative.
    Keywords: agricultural cooperatives in Texas, managers, board of directors, relationship, performance, job satisfaction, strategic planning, Agribusiness, Agricultural Finance,
    Date: 2015
  10. By: Demircioğlu, Emre
    Abstract: Performance and happiness go hand in hand in creating a corporation flourishing. With each associate in nursing acceptable performance management system and a positive approach to influencing those who will increase happiness, associate in nursing organization’s key results will additional probably be achieved and sustained. Employee performance affects company performance, If you categorical clear expectations to your workers, each you and your company can relish augmented motivation and every one that interprets directly into clearly measurable goals, improved morale, a happier geographical point and better profits. See whether or not your company has all of the objectives of performance management in situ, and whether or not you’re really receiving all of the benefits! Business outcome measures are assessed as well as client satisfaction, worker performance and worker happiness. Each applied mathematics (regression analysis/p-values) and analysis are used retrospectively on knowledge collected over 3 years. The research paper explore the link between happiness and performance victimization a longtime leadership development program designed to extend the amount of happy – high performers in a company inside an outsized international corporation. There are, however, implications for leadership, future analysis regarding happy – high performance and teaching. Leaders recognized their impact on worker happiness and performance and learned however happiness are often evaluated in reference to a lot of ancient business measures. The everyday method of educational theory preceding field application is reversed during this field study. The observations from the sector might interest practitioners and stimulate academics to any study happy – high performance in workplace settings. Trends within the applied mathematics knowledge, leadership feedback and responses from a “Happiness Index” establish many themes including: (1) happiness and performance tend to maneuver within the same direction, (2) high play acting staff manufacture glad customers, and (3) happy staff end in glad customers. the tiny sample size, retrospective nature of the analysis and lack of a longitudinal approach cause the results and conclusions to be strained.
    Keywords: organization performance, organization happiness, workplace, psychological well-beings, leadership
    JEL: L2 L21 L26
    Date: 2014–01
  11. By: OECD
    Abstract: Every three years, when PISA results are published, the world’s media focuses on countries’ rankings in mathematics, reading and science performance. Often, what is lost in the subsequent national-level soulsearching about how to improve student performance is the fact that many countries have raised their game significantly since the first PISA test was conducted in 2000. In fact, half of the countries and economies that have participated in at least three PISA cycles have improved significantly in reading performance since 2000, a third have improved in mathematics performance since 2003, and almost a third have improved in science performance since 2006.
    Date: 2015–01
  12. By: B. Zorina Khan
    Abstract: Endogenous growth models raise fundamental questions about the nature of human creativity, and the sorts of resources, skills, and knowledge inputs that shift the frontier of technology and production possibilities. Many argue that the nature of early British industrialization supports the thesis that economic advances depend on specialized scientific training or the acquisition of costly human capital. This paper examines the contributions of different types of knowledge to British industrialization, by assessing the backgrounds, education and inventive activity of the major contributors to technological advances in Britain during the crucial period between 1750 and 1930. The results indicate that scientists, engineers or technicians were not well-represented among the British great inventors until very late in the nineteenth century. Instead, important discoveries and British industrial advances were achieved by individuals who exercised commonplace skills and entrepreneurial abilities to resolve perceived industrial problems. For developing countries today, the implications are that costly investments in specialized human capital resources might be less important than incentives for creativity, flexibility, and the ability to make incremental adjustments that can transform existing technologies into inventions that are appropriate for prevailing domestic conditions.
    JEL: J24 N13 O14 O3 O31 O34
    Date: 2015–01
  13. By: Oliver Levine (University of Wisconsin-Madison ); Brent Glover (Carnegie Mellon University )
    Abstract: Compensating a manager with equity-based pay induces effort but also exposes the manager to firm-specific risk. In comparison to a diversified shareholder, this distorts the manager's discount rate and, in turn, investment and financing decisions. We embed this agency conflict in a structural model of the firm and estimate its effect on firm policies. We estimate the agency friction for a large panel of U.S. public firms and find significant cross-sectional and time-series variation in a manager's incentive to over- or under-invest. Our panel of incentive estimates helps to explain a broad set of empirical patterns, including investment, leverage, cash holdings, valuation ratios, and acquisition activity.
    Date: 2014
  14. By: Janina Stankiewicz (University of Zielona Gora, Polzand ); Marta Moczulska (University of Zielona Gora, Polzand )
    Abstract: The development of information technology, increase demand for mental work, shortening product life cycle and competing of the quality meant that knowledge is widely considered to be one of the most important resources of the organization. Taking into account activities related to the process of knowledge management (such as the acquisition of knowledge from the environment, identifying its in the organization, knowledge sharing) and their sources (internal and external stakeholders) can be noted that any knowledge management requires the involvement of employees. Based on the analysis of the employees engagement was found that managing knowledge should be supported by the affective commitment and focused on work organization and environment. They exhibit a specific behavior. Recognizing this problem for interesting the empirical research was carried out. Their goal was to identify the prevalence of involvement of employees in knowledge management and the desired employee behavior in the various activities of this processes. The study conducted among enterprises of Lubuskie province. The research used a survey method. It was found that the surveyed enterprises implement the activities related to knowledge management in a selective manner. In the light of the adopted criteria only one (out of 102) of the surveyed companies could be considered as knowledge management. It also seems that the attention is not focused on the creation of knowledge but its acquisition and protection. Taking into account the results of research on behavior conducive to knowledge management can be concluded that the climate for creativity exists at the level of teams but not the organization.
    Keywords: employees involvement, knowledge management, process, activity, behaviour
    JEL: D83
    Date: 2014–12
  15. By: Minasyan, Vigen
    Abstract: The paper addresses a basic model of moral hazard (risk) [Gibbons, 2010; Gibbons, 2005] and suggests some of its modifications. In the basic model of moral risk, questions are put and examined that have not been considered in the previous researches. In particular, it is proved that the level of agent's efforts that maximizes its expected utility coincides with the level of efforts that minimize the risk of obtaining this maximum utility. Modifications of the moral risk model are considered where the optimal behavior of the principal and the agent considerably differ from the respective behavior in the moral risk model. The paper introduces moral risk measures VaR for the principal and VaR for the agent that specify the qualitative assessments of risk on the part of the principal and the agent in their relationships.
    Keywords: model of moral hazard (risk), expected utility, VaR for the principal, VaR for the agent, measure of the utility risk, lognormally distributed random variable.
    JEL: C10 G22
    Date: 2014–05
  16. By: Chia-Hui Chen ; Junichiro Ishida
    Abstract: We consider a gtenure-clock problemh in which a principal may set a deadline by which she needs to evaluate an agent's ability and decides whether to promote him or not. We embed this problem in a continuous-time model with both hidden action and hidden information, where the principal must induce the agent to exert effort to facilitate her learning process. The value of committing to a deadline is examined in this environment, and factors that make the deadline more profitable are identified. Our simple framework allows us to obtain a complete characterization of the equilibrium, both with and without commitment, and provides insight into why up-or-out contracts are prevalent in some industries while they are almost non-existent in others.
    Date: 2015–01
  17. By: Reinert, Regina M. ; Weigert, Florian ; Winnefeld, Christoph H.
    Abstract: This study examines the relationship between the proportion of women in top management positions of banks and the financial performance of these institutions. Using prudential data from supervisory reporting for all credit institutions in the Grand-Duchy of Luxembourg from 1999 to 2013, we find a positive association between female management representation and firm performance. The economic effect is substantial: A 10% increase of women in top management positions improves the bank's future return on equity by more than 3% p.a. Moreover, we show that this positive relationship is (i) almost twice as large during the global financial crisis than in stable market conditions and (ii) non-linear with the most successful banks having a female management share in the range between 20% and 40%.
    Keywords: Management Diversity, Female Management Representation, Bank Performance
    JEL: G21 J16 L25 M14
  18. By: Wonki Jo Cho ; Alejandro Saporiti
    Date: 2015

This nep-hrm issue is ©2015 by Tommaso Reggiani. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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