nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒02‒22
fifteen papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. Behaving kindly, talking about it, and being rewarded for it?! By Walkowitz, Gari; Gürtler, Oliver; Wiesen, Daniel
  2. Service Organizations: Customer Contact, Knowledge, and Incentives of Managers By Kirchmaier, Isadora
  3. Human Capital of Spinouts By Natarajan Balasubramanian; Mariko Sakakibara
  4. Do employers trust workers too little? An experimental study of trust in the labour market By Paolo Falco; Stefano A. Caria
  5. Do Self-Determined Wages Really Improve Employees Performance? Evidence from a Randomized Field Experiment By Jeworrek, Sabrina; Mertins, Vanessa
  6. Health information, treatment, and worker productivity: Experimental evidence from Malaria testing and treatment among Nigerian sugarcane cutters By Andrew Dillon; Jed Friedman; Pieter Serneels
  7. Human capital externalities vs. substitution effects as determinants of regional wages: Evidence from German micro data By Thönnessen, Rasmus
  8. Wage dynamics, turnover, and human capital : evidence from adolescent transition from school to work in the Philippines By Yamauchi, Futoshi
  9. The Magic of the New: How Job Changes Affect Job Satisfaction By Hetschko, Clemens; Chadi, Adrian
  10. Innovative Strategies in Higher Education for Accelerated Human Resource Development in South Asia By Asian Development Bank (ADB); ; ;
  11. How do Non-Monetary Performance Incentives for Physicians Affect the Quality of Medical Care? A Laboratory Experiment By Kairies-Schwarz, Nadja; Krieger, Miriam
  12. The Literary Inquisition: The Persecution of Intellectuals and Human Capital Accumulation in China By Koyama, Mark; Xue, Melanie Meng
  13. Human capital, basic research, and applied research: three dimensions of human knowledge and their differential growth effects By Werner, Katharina; Prettner, Klaus
  14. The Impact of Teacher Skills on Student Performance across Countries By Piopiunik, Marc; Hanushek, Eric A.; Wiederhold, Simon
  15. Unequal Incentives and Perceived Fairness in Groups By Gerald Eisenkopf

  1. By: Walkowitz, Gari; Gürtler, Oliver; Wiesen, Daniel
    Abstract: In a principal-agent setup, we investigate agents disclosure of conflict of interests revealing deliberate or undeliberate kindness and its affect on principals reciprocal behavior. To this end, we firstly introduce a theoretical model refering to Hart and Moore (2008) which captures aspects of information revelation and reciprocal behavior. Secondly, a laboratory experiment (N = 444) tests behavioral predictions derived from the model. In the experiment, nature randomly determines the agent s choice set: either the agent can deliberately choose to behave kindly towards the principal (conflict of interest situation) or behaving kindly is the default. In any case, the agent can inform the principal about the available choice set. The principal can reciprocate the agent s behavior. We find agents to reveal their state when they are deliberately kind. Moreover, revealing a conflict of interest situation strongly triggers further reciprocal behavior by the principal. Our findings are robust towards different parameter variations. Implications are discussed.
    JEL: C91 D82 D01
    Date: 2014
  2. By: Kirchmaier, Isadora
    Abstract: Service organizations provide an environment for solving tasks given by customers. The performance of the organization is dependent on many factors including organizational structure, incentive structure and communication of knowledge within the organization. The manager assigns tasks to be solved to workers in his division. Depending on the workload of the division, arriving tasks may not be dealt with immediately and are queued. The manager of a division determines the amount of customer contact on behalf of the principal. If these actions are not observable, the manager could favour his private interests over the interests of the principal. Human resource management has a key role by aligning the employees ability, motivation, and opportunity and has an influence on knowledge acquisition and resourcing. The purpose of this paper is to investigate the interdependence of the goals of human resource management and the incentives of managers. A framework is provided where the optimal reward structure, number of workers and amount of knowledge in a division, and the optimal amount of customer contact by the manager is determined. It is shown that 1) a bonus-based contract exists under which the optimal amount of customer contact under symmetric information can be implemented. 2) While lower level managers engage in more customer contact, higher level managers have to deal with more arriving tasks in total. They deal with tasks originating from customer contact as well as with unsolved tasks from lower level management. 3) If human resource management assigns workers with a higher ability to acquire knowledge to divisions with a higher rank, then the optimal amount of knowledge of workers is increasing in rank. 4) If the costs of queueing become more important the acquired knowledge decreases while the number of workers in each division increases.
    JEL: D23 D80 M12
    Date: 2014
  3. By: Natarajan Balasubramanian; Mariko Sakakibara
    Abstract: This study examines how the human capital of spinout founders and the performance of parent firms affect the success of spinouts by using a matched employer-employee dataset of new ventures covering 7 SIC 1-digit sectors in the United States. Our data cover 29,100 spinouts and 379,800 new ventures formed by lone entrepreneurs in 23 states between 1992 and 2005. We evaluate several components of human capital: outcomes of human capital investments vs. human capital investments, task-related human capital vs. non-task-related human capital, and individual human capital vs. group capital, and examine whether these types of human capital affect spinout performance differently. We find that spinout founder’s earnings (an outcome of human capital investment) and industry experience (task-related human capital) prior to spinout formation have strong positive correlations with spinout performance, as measured by size, wage and growth rate. We also find that group experience of spinout founders prior to spinout formation has a positive correlation with spinout performance, though this effect is slightly weaker and smaller than those of spinout founder’s earnings and industry experience. The effects of these three measures of human capital are mostly present after controlling for parent firm establishment fixed effects. We find some evidence that the size of parent firm establishments has a positive correlation with spinout performance, but this effect does not hold after controlling for parent firm fixed effects. Finally, we find that founder’s earnings, industry experience, group experience and parent firm size are more important during the early stage of spinout formation.
    Date: 2015–01
  4. By: Paolo Falco; Stefano A. Caria
    Abstract: We conduct a field experiment to investigate employers' trust in workers.  A sample of real entrepreneurs and workers from urban Ghana are respectively assigned to the roles of employers and employees.  Employers have the option to hire (trust) an employee, who can in turn choose whether to exert effort (trustworthiness) in the real-effort task.  By comparing employers' expectations to workers' revealed trustworthiness, we are able to detect potential misperceptions leading to sub-optimal hiring.  We further devise two randomized treatments to test for the existence of expectation bias against specific workers categories and estimate the elasticity of employers' beliefs with respect to new information.  We find that employers significantly underestimate workers' trustworthiness and this reduces their profit.  Employees are aware of employers' sub-optimal trust.  Expectations are largely inelastic with respect to news and negative signals have a strong (downward) effect than positive ones.  Our results suggest that raising employers' expectations would have a strong impact on hiring.
    Keywords: trust, trustworthiness, expectations, effort, hiring, microenterprise, learning, discrimination, experiment, African labour markets
    JEL: J23 J71 O15 C9
    Date: 2014–01–15
  5. By: Jeworrek, Sabrina; Mertins, Vanessa
    Abstract: Recent laboratory evidence suggests that employees who have the extraordinary right to self-determine their wages perform better. By conducting a natural field experiment, we aim to test whether this policy actually has the predicted positive effects in a real-labor market. Employees were hired to file business reports for a half-day job. After one hour of working time, a random sample of employees was allowed to choose their own wage, whereas another control group was denied this right, while being paid the same wages as the first group. We find that performance is about 12% higher when employees self-determine their wage, whereas self-determined wages are about 20% higher . A last treatment group differed from the former only in that employees were aware that others have been granted this extraordinary right. Surprisingly, we observe here no performance decrease. An online follow-up survey reveals that the surprisingly high level of performance seems to be driven by individuals scoring high on agreeableness and wanting to prove to be trustworthy.
    JEL: C93 J33 M52
    Date: 2014
  6. By: Andrew Dillon; Jed Friedman; Pieter Serneels
    Abstract: Agricultural and other physically demanding sectors are important sources of growth in developing countries but prevalent diseases such as malaria adversely impact the productivity, labor supply, and occupational choice of workers in these sectors by reducing physical capacity.  This study identifies the impact of malaria on worker earnings, labor supply, and daily productivity by randomizing the temporal order at which piece-rate workers at a large sugarcane plantation in Nigeria are offered malaria testing and treatment.  The results indicate a significant and substantial intent to treat effect of the intervention - the offer of a workplace based malaria testing and treatment program increases worker earnings by approximately 10% over the weeks following the mobile clinic visit.  The study further investigates the effect of health information by contrasting program effects by workers revealed health status.  For workers who test positive for malaria, the treatment of illness increases labor supply, leading to higher earnings.  For workers who test negative, and especially for those workers most likely to be surprised by the healthy diagnosis, the health information also leads to increased earnings via increased productivity.  Possible mechanisms for this response include selection into higher return occupations as a result of changes in the perceived cost of effort.  A model of the worker labor decision that includes health perceptions in the decisions to supply effort suggests that, in endemic settings with poor quality health services, inaccurate health perceptions may lead workers to misallocate labor thus resulting in sub-optimal production and occupational choice.  The results underline the importance of medical treatment but also of access to improved information about one's health status, as the absence of either may lead workers to deliver lower than optimal effort levels in lower return occupations.
    Keywords: malaria, labor supply, labor productivity, randomized experiment
    JEL: I12 J22 J24 O12
    Date: 2014–03–02
  7. By: Thönnessen, Rasmus
    Abstract: This article reconsiders the empirical evidence on regional human capital externalities using longitudal survey data from the German Socio-Economic Panel (SOEP). It complements the empirical literature on the role of human capital for explaining regional wage differences. Based on the framework by Moretti (2004a), the impact of different proxies of regional human capital intensity on regional wages is estimated while controlling for individual productivity determinants and regional characteristics. The results are compared with the constant-composition approach by Ciccone and Peri (2006) which accounts for imperfect substitution between unskilled and skilled labor. The Mincerian panel results with level data indicate that one additional year of education has an external wage effect of 2%. However, once a difference specification is estimated, external effects are no longer present. The theoretical predictions by Ciccone and Peri (2006) that the Mincerian approach leads to an upward biased estimate cannot be verified.
    JEL: J24 R23 R11
    Date: 2014
  8. By: Yamauchi, Futoshi
    Abstract: This paper examines wage dynamics and turnover using tracking data of adolescents from the Philippines. The analysis uses individual test scores in grade 6 to proxy abilities. The empirical results show that (i) returns to labor market experience are large, nearly a half of the conventional estimate of returns to schooling; (ii) returns to experience are higher if educational attainment and/or test scores are higher; and (iii) ability, measured by test scores, positively influences the upgrading of occupations toward more skilled categories, although educational attainment plays an important role in determining the first occupation. The complementarity between schooling and experience is greater among good performers who show high test scores; education and ability augment gains from accumulating labor market experiences.
    Keywords: Labor Markets,Tertiary Education,Secondary Education,Educational Sciences,Teaching and Learning
    Date: 2015–01–01
  9. By: Hetschko, Clemens; Chadi, Adrian
    Abstract: We investigate a crucial event for job satisfaction: changing the workplace. For representative German panel data, we show that the reason why the previous employment ended is strongly linked to the satisfaction with the new job. When workers initiate a change of employer, they experience relatively high job satisfaction, though only in the short-term. To test causality, we exploit plant closure as exogenous trigger of job switching and find no causal effect of job changes on job satisfaction. Our findings concern research on workers well-being as well as labor market and human resource policies.
    JEL: I31 J28 J63
    Date: 2014
  10. By: Asian Development Bank (ADB); (South Asia Department, ADB); ;
    Abstract: This publication highlights priorities and strategies in meeting current and emerging needs for skills development in South Asia. The report is in line with the Asian Development Bank’s effort to support its developing member countries’ priorities toward global competitiveness, increased productivity, and inclusive growth. It also identifies key issues, constraints and areas of improvement in making skills training more responsive to emerging labor market needs in South Asia as an important factor in sustaining high economic growth. The report was completed in 2012 under the Australian AID-supported Phase 1 of Subproject 11 (Innovative Strategies for Accelerated Human Resource Development) of RETA 6337 (Development Partnership Program for South Asia).
    Keywords: education, technical skills, vocational skills, labor market, gender inequality, human resources, human capital, innovation, knowledge, skills, human development index, secondary education, labor force, skilling, upskilling, TVET, skills development, training programs, higher education, youth, strategies and innovations, higher education
    Date: 2014–06
  11. By: Kairies-Schwarz, Nadja; Krieger, Miriam
    Abstract: In recent years, several countries have introduced non-monetary performance incentives for health care providers to improve the quality of medical care. Evidence on the effect of non-monetary feedback incentives, predominantly in the form of public quality reporting, on the quality of medical care is, however, ambiguous. This is often because empirical research to date has not succeeded in distinguishing between the effects of monetary and non-monetary incentives, which are usually implemented simultaneously. We use a controlled laboratory experiment to isolate the impact of non-monetary performance incentives: subjects take on the role of physicians and make treatment decisions for patients, receiving feedback on the quality of their treatment. The subjects decisions result in payments to real patients. By giving either private or public feedback we are able to disentangle the motivational effects of self-esteem and social reputation. Our results reveal that public feedback incentives have a significant and positive effect on the quality of care that is provided. Private feedback, on the other hand, has no impact on treatment quality. These results hold for medical students and for other students.
    JEL: I11 C91 L15
    Date: 2014
  12. By: Koyama, Mark; Xue, Melanie Meng
    Abstract: Imperial China used an empire-wide system of examinations to select civil servants. Using a semiparametric matching-based difference-in-differences estimator, we show that the persecution of scholar-officials led to a decline in the number of examinees at the provincial and prefectural level. To explore the long-run impact of literary inquisitions we employ a model to show that persecutions could reduce the provision of basic education and have a lasting effect on human capital accumulation. Using the 1982 census we find that literary inquisitions reduced literacy by between 2.25 and 4 percentage points at a prefectural level in the early 20th century. This corresponds to a 69% increase in the probability of an individual being illiterate. Prefectures affected by the literary inquisition had a higher proportion of workers in agriculture until the 1990s.
    Keywords: China, Human Capital, Institutions, Persecutions, Persistence
    JEL: N0 N45 O1 O15
    Date: 2015–02–11
  13. By: Werner, Katharina; Prettner, Klaus
    Abstract: We analyze the di fferential growth e ffects of basic research, applied research, and embodied human capital accumulation in an R&D-based growth model with endogenous fertility and endogenous education. In line with the empirical evidence, our model allows for i) a negative association between long-run economic growth and population growth, ii) a positive association between long-run economic growth and education, and iii) a positive association between the level of per capita GDP and expenditures for basic research. Our results also indicate that raising public investments in basic research reduces the growth rate of GDP in the short run because resources have to be drawn away from other productive sectors of the economy. These short-run costs of basic research might be an explanation for the reluctance of governments to increase public R&D expenditures notwithstanding the long-run benefi ts of such a policy.
    JEL: O41 H41 J11
    Date: 2014
  14. By: Piopiunik, Marc; Hanushek, Eric A.; Wiederhold, Simon
    Abstract: Student performance differs greatly across countries, but little is known about the role of teacher quality in explaining these differences. New international data from the PIAAC survey of adult skills allow for the first time to quantify teacher skills in numeracy and literacy, providing country-level measures of teacher subject knowledge. Our student-level regressions with PISA data exploit between-subject variation to overcome bias from unobserved country heterogeneity and control for parent skills to account for the persistence of skills across generations. We find that a one-standard-deviation increase in subject-specific teacher skills raises student performance by 7 percent of a standard deviation in math and 6 percent in reading.
    JEL: I20 H40 H52
    Date: 2014
  15. By: Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany; National Institute for Health and Welfare (THL), P.O. Box 30, 00271 Helsinki, Finland)
    Abstract: In many groups heterogeneous incentives induce people to make unequal contributions to a common pool. This paper studies whether people consider the random assignment of such unequal incentives as unequal opportunities and demand more egalitarian distributions of the pool. The aggregate experimental results show that low contributors do not make such consideration if their incentive scheme provided opportunities for private gains in case of low contributions. When incentives induce lower contributions in order to avoid private losses, some people increase their claim but these increases are lower than in the case of unequal opportunities. Meanwhile high contributors reward low contributors if they do not follow incentives.
    Keywords: Distributive Justice, Unequal Incentives, Experiment, Entitlements
    JEL: C78 C91 D03 D31 M52
    Date: 2015–01–29

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