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on Human Capital and Human Resource Management |
| By: | Eleni Garbi; Christos Genakos; Mario Pagliero |
| Abstract: | Tournaments are designed to enhance participants' effort and productivity. However, ranking near the top may increase psychological pressure and reduce performance. We empirically study the impact of interim rank on performance using data from international diving tournaments. We find that competitors systematically underperform when ranked closer to the top, despite higher incentives to perform well. |
| Keywords: | Tournaments, incentives, choking under pressure |
| JEL: | J24 L83 M52 Z13 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1345&r=hrm |
| By: | Elni Garbi; Christos Genakos; Mario Pagliero |
| Abstract: | Tournaments are designed to enhance participants’ effort and productivity. However, ranking near the top may increase psychological pressure and reduce performance. We empirically study the impact of interim rank on performance using data from international diving tournaments. We find that competitors systematically underperform when ranked closer to the top, despite higher incentives to perform well. |
| Keywords: | Tournaments; incentives; choking under pressure |
| JEL: | J24 L83 M52 Z13 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:61700&r=hrm |
| By: | Albert Park (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Naureen Karachiwalla (International Food Policy Research Institute (IFPRI)) |
| Abstract: | We provide the first evidence that promotion incentives can influence effort of employees in the public sector by studying China’s system of annual evaluations and promotions for teachers. Theoretical predictions from a tournament model of promotion incentives are tested using panel data on primary and middle school teachers in western China. Consistent with theory, we find that promotions are associated with significant wage increases, that higher wage increases are associated with higher effort, that teachers increase effort in the years leading up to promotion eligibility but reduce effort if they are repeatedly passed over for promotion, and that increasing the number of competitors reduces the relative performance of those at the extremes of the skill distribution. Evaluation scores are positively associated with time spent on teaching and with student test scores, diminishing concerns that evaluations are manipulated. |
| Keywords: | teacher incentives, promotions, China |
| JEL: | J31 J33 J45 M51 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201509&r=hrm |
| By: | Raphael Franck; Oded Galor |
| Abstract: | The research explores the effect of industrialization on human capital formation. Exploiting exogenous regional variations in the adoption of steam engines across France, the study establishes that in contrast to conventional wisdom that views early industrialization as a predominantly deskilling process, the industrial revolution was conducive for human capital formation, generating broad increases in literacy rates and education attainment. |
| Keywords: | Capital-Skill Complementarity, Economic Growth, Industrialization, Human Capital, Steam Engine. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2015-3&r=hrm |
| By: | Dessi, Roberta; Ristichini, Aldo |
| Abstract: | A large literature in psychology, and more recently in economics, has argued that monetary rewards can reduce intrinsic motivation. We investigate whether the negative impact persists when intrinsic motivation is strong, and test this hypothesis experimentally focusing on the motivation to undertake interesting and challenging tasks, informative about individual ability. We find that this type of task can generate strong intrinsic motivation, that is impervious to the effect of monetary incentives, particularly when the individual is "racing against himself". In our experiments, monetary incentives have no significant impact on performance. In a second experiment using the same kind of task but a setting designed to weaken intrinsic motivation, monetary incentives do have a significant, positive, effect on performance. This result confirms that our experimental setup may, with appropriate conditions, replicate the known crowding out effects. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:29268&r=hrm |
| By: | Zapf, Ines (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "In Germany, overtime work is a well-established instrument for varying working hours of employees and is of great importance for establishments as a measure of internal flexibility. However, not all employees are affected to the same degree by a variation of the work effort through overtime work. Besides socio-demographic factors, workplace-specific factors that provide information about the position of employees in the establishment play an important role, too. So far, we do not know enough how these workplace-specific factors are associated with overtime work. This question is at the centre of this study. In the analysis, women and part-time employees are taken into account, while previous studies mostly focused on fulltime employees and/or male workers. On the basis of the data of the German Socio- Economic Panel (SOEP), the results show a significant negative correlation between women and paid overtime and between part-time employees and unpaid overtime. If the employees performance is regularly assessed by a superior, paid overtime is less likely, while unpaid overtime becomes more likely. In executive positions, there is a significant positive correlation with paid and unpaid overtime work. Unpaid overtime is more likely with a growing autonomy in the employees' workplace, whereas paid overtime becomes less likely. However, the length of the training period on the job as well as job related burdens due to a job at risk and a limited employment contract seem to have no association with paid or unpaid overtime." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Überstunden - Determinanten, unbezahlte Überstunden - Determinanten, Frauen, Männer, Vollzeitarbeit, Teilzeitarbeit, Führungskräfte, befristeter Arbeitsvertrag, Arbeitsbelastung, Einarbeitung, Handlungsspielraum, Sozioökonomisches Panel, Arbeitszeitflexibilität |
| JEL: | J21 J24 J81 |
| Date: | 2015–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201515&r=hrm |
| By: | Titus Galama (University of Southern California); Hans van Kippersluis (Erasmus School of Economics) |
| Abstract: | This paper presents a unified theory of human capital with both health capital and, what we term, skill capital endogenously determined within the model. By considering joint investment in health capital and in skill capital, the model highlights similarities and differences in these two important components of human capital. Health is distinct from skill: health is important to longevity, provides direct utility, provides time that can be devoted to work or other uses, is valued later in life, and eventually declines, no matter how much one invests in it (a dismal fact of life). Lifetime earnings are strongly multiplicative in skill and health, so that investment in skill capital raises the return to investment in health capital, and vice versa. The theory provides a conceptual framework for empirical and theoretical studies aimed at understanding the complex relationship between education and health, and generates several new testable predictions. |
| Keywords: | health investment, lifecycle model, human capital, health capital, optimal control |
| JEL: | D91 I10 I12 J00 J24 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2015-007&r=hrm |
| By: | Hirsch, Boris (University of Erlangen-Nuremberg); Lechmann, Daniel S. J. (University of Erlangen-Nuremberg); Schnabel, Claus (University of Erlangen-Nuremberg) |
| Abstract: | Presenteeism, i.e. attending work while sick, is widespread and associated with significant costs. Still, economic analyses of this phenomenon are rare. In a theoretical model, we show that presenteeism arises due to differences between workers in (health-related) disutility from workplace attendance. As these differences are unobservable by employers, they set wages that incentivise sick workers to attend work. Using a large representative German data set, we test several hypotheses derived from our model. In line with our predictions, we find that bad health status and stressful working conditions are positively related to presenteeism. Better dismissal protection, captured by higher tenure, is associated with slightly fewer presenteeism days, whereas the role of productivity and skills is inconclusive. |
| Keywords: | presenteeism, absenteeism, sick leave, Germany |
| JEL: | I19 J22 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9015&r=hrm |
| By: | Ken Burdett (University of Pennsylvania); Carlos Carrillo-Tudela (University of Essex, CEPR, CESifo and IZA); Melvyn Coles (University of Essex) |
| Abstract: | The objective of this paper is to study why are some workers paid more than others. To do so we construct and quantitatively assess an equilibrium search model with on-the-job search, general human capital accumulation and two sided heterogeneity. In the model workers differ in abilities and firms differ in their productivities. The model generates a simple (log) wage variance decomposition that is used to measure the importance of firm and worker productivity differentials, frictional wage dispersion and workers' sorting dynamics. We calibrate the model using a sample of young workers for the UK. We show that heterogeneity among firms generates a lot of wage inequality. Among low skilled workers job ladder effects are small, most of the impact of experience on wages is due to learning-by-doing. High skilled workers are much more mobile. Job ladder effects have sizeable impact. |
| Keywords: | Job search, human capital accumulation, wage inequality, turnover |
| JEL: | J63 J64 J41 J42 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:apc:wpaper:2015-042&r=hrm |
| By: | Peiwen Bai; Wenli Cheng |
| Abstract: | This paper studies the relationship between three measures of relative earnings and firm performance based on data of 664 listed manufacturing companies in China over the period 2005-2012. It finds that (1) capital earnings relative to labor earnings and the overall average wage level relative to a firm’s average wage level had negative effects on firm performance; (2) the earnings of high-level managers relative to ordinary workers had a positive impact on firm performance; and (3) the effects of relative earnings on firm performance differed across regions, industry characteristics, and firm ownership structures, and over different time periods. |
| Keywords: | relative income share of capital and labor, relative earnings of management and workers, relative wage, firm performance in China |
| JEL: | D24 J31 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2014-51&r=hrm |
| By: | Aghion, Philippe (Harvard University); Fehr, Ernst (University of Zurich); Holden, Richard (University of New South Wales); Wilkening, Tom (University of Melbourne) |
| Abstract: | In this paper we conduct a laboratory experiment to test the extent to which Moore and Repullo's subgame perfect implementation mechanism induces truth-telling in practice, both in a setting with perfect information and in a setting where buyers and sellers face a small amount of uncertainty regarding the good's value. We find that Moore-Repullo mechanisms fail to implement truth-telling in a substantial number of cases even under perfect information about the valuation of the good. This failure to implement truth-telling is due to beliefs about the irrationality of one's trading partner. Therefore, although the mechanism should – in theory – provide incentives for truth-telling, many buyers in fact believe that they can increase their expected monetary payoff by lying. The deviations from truth-telling become significantly more frequent and more persistent when agents face small amounts of uncertainty regarding the good's value. Our results thus suggest that both beliefs about irrational play and small amounts of uncertainty about valuations may constitute important reasons for the absence of Moore-Repullo mechanisms in practice. |
| Keywords: | implementation theory, incomplete contracts, experiments |
| JEL: | D23 D71 D86 C92 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8971&r=hrm |
| By: | Melody M. Chao (Department of Management, Hong Kong University of Science and Technology); Rajeev Dehejia (Wagner School of Public Policy, New York University); Anirban Mukhopadhyay (Department of Marketing, Hong Kong University of Science and Technology); Sujata Visaria (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology) |
| Abstract: | In an experiment in non-formal schools in Indian slums, an incentive for attending a target number of school days increased average attendance when the incentive was in place, but had heterogeneous effects after it was removed. Among students with high baseline attendance, the post-incentive attendance returned to previous levels and test scores were unaffected. Among students with low baseline attendance, post-incentive attendance dropped even below previous levels, and test scores decreased. These students also reported lower interest in school material and lower expectations of themselves. Thus incentives might have unintended negative consequences in the long term for the very students they are most expected to help. |
| Keywords: | educational economics, incentives, attendance, motivation, experiment |
| JEL: | I21 I28 O53 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201522&r=hrm |
| By: | Michela Martinoia |
| Abstract: | The paper aims to the laying out of conceptual and empirical bases for analyzing the impact of the intangible elements have on local performance. These include the cultural and natural heritage and human capital both in the process of territorial growth – regional and provincial – and in the process of responses to exogenous shocks as in the current economic and financial crisis. To achieve this goal, we started from a critical review of theoretical and empirical literature on the possible extent of human capital and intangible resources – cultural, artistic, architectural, landscape and natural. Then, we dealt with the setting up of a national database for territorial capital of intangible resources and human capital in the 103 Italian Provinces NUTS3, limited to 1991, 2001, 2007. Data were supplied by institutional sites like: European Project ESPON, Eurostat, Istat and Tagliacarne Institute. The purpose of data collection is to identify, define and build up synthetic quantitative indicators relating to human capital endowment – educational terms and qualifications, professions as well as natural, cultural art resources, and the tourism industry. Finally we analyzed the positioning of the Italian provinces compared to the national average endowment of territorial capital. |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:liu:liucec:278&r=hrm |
| By: | David Marsden |
| Abstract: | The paper examines recent evidence on the erosion of the German industrial relations model. Although its coverage has declined, much of this has occurred in smaller and newer establishments, and compared with Britain, it has remained solid in the areas of Germany's traditional industrial strength. This is explained by the nature of high performance work systems that involve flexible working and on-the-job problem-solving. Both countries have modernised their work systems in recent decades, with German industrial firms maintaining higher degrees of worker autonomy and learning and British ones relying more on managerial control. The survival of the German model in this sector, as compared with services, is attributed to the role of such work systems in the high end of international competition. A model is developed to explain why stable cooperation within these work relationships is enhanced by means of a strong institutional framework. It is then used to explain why employers in the sectors using these systems have continued to work within these institutions. It is argued that employers’ increased focus on the match between commercial needs and workplace institutions has contributed to the growing segmentation within German industrial relations which has been widely documented, and represents a departure from the classical post-war German model. The article finishes by asking how far this can go before damaging social and political cohesion. |
| Keywords: | Subjective well-being; political agency; elections |
| JEL: | J24 J5 M55 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:61699&r=hrm |
| By: | Carlos Carrillo-Tudela (University of Essex); Leo Kaas (University of Konstanz) |
| Abstract: | We analyze the effects of adverse selection on worker turnover and wage dynamics in a frictional labor market. We consider a model of on-the-job search where firms offer promotion wage contracts to workers of different ability, which is unknown to firms at the hiring stage. With sufficiently strong information frictions, low-wage firms offer separating contracts and hire all types of workers in equilibrium, whereas high-wage firms offer pooling contracts, promoting high-ability workers only. Low-ability workers have higher turnover rates and are more often employed in low-wage firms. The model replicates the negative relationship between job-to-job transitions and wages observed in the U.S. labor market. |
| Keywords: | Adverse Selection, On-the-job search, Worker mobility, Wage dynamics |
| JEL: | J63 J64 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:apc:wpaper:2015-040&r=hrm |
| By: | Collewet, Marion (Maastricht University); de Grip, Andries (ROA, Maastricht University); de Koning, Jaap (Erasmus University Rotterdam) |
| Abstract: | This paper uncovers 'conspicuous work' as a new form of status seeking that can explain social interactions in labour supply. We analyse how peer working time relates to both labour supply and happiness for Dutch male workers. Using a unique measure of peer weekly working time, we find that men's working time increases with that of their peers and that peer working time is negatively related to men's happiness. These findings are consistent with a 'conspicuous work' model, in which individuals derive status from working time. |
| Keywords: | well-being, social norms, working hours |
| JEL: | J22 I31 D62 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9011&r=hrm |
| By: | Ylenia Brilli (European University Institute); Marco Tonello (Bank of Italy) |
| Abstract: | We estimate the contemporaneous effect of education on adolescent crime by exploiting the variation in crime rates between different cohorts and at different ages that followed a reform that raised the school-leaving age in Italy. A 1 percentage-point increase of the enrollment rate reduces adolescent crime by 1.3 per cent in the North of Italy but increases it by 3.9 per cent in the South. The crime-reducing effect depends mainly on incapacitation (i.e. adolescents stay in school instead of on the street); the crime-increasing effect is consistent with a channel of criminal capital accumulation, operating through social interactions and organized-crime networks. |
| Keywords: | adolescent crime, school enrollment, incapacitation, human capital |
| JEL: | I20 I28 J13 K42 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1008_15&r=hrm |
| By: | Bryan, Mark L. (University of Essex); Bryson, Alex (National Institute of Economic and Social Research (NIESR)) |
| Abstract: | Using data from the British Household Panel Survey (BHPS) we show performance pay (PP) increased earnings dispersion among men and women, and to a lesser extent among full-time working women, in the decade of economic growth which ended with the recession of 2008. PP was also associated with some compression in the lower half of the wage distribution for women. The effects were predominantly associated with a broad measure of PP that included bonuses. However, these effects were modest and there is no indication that PP became increasingly prevalent, as some had predicted, over the decade prior to recession. |
| Keywords: | wages, wage inequality, performance pay, bonuses |
| JEL: | J31 J33 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8995&r=hrm |
| By: | Aristotelis Boukouras |
| Abstract: | This paper provides a theoretical model for explaining the separation of ownership and control in fi rms. An entrepreneur hires a worker for providing effort to complete a project. The worker's effort determines the probability that the project is completed on time, but the worker receives private benefit s for every period she is employed. We show that hiring a manager on a short-term contract may increase firm value and we identify the conditions under which separation of ownership and control is optimal. |
| Keywords: | commitment problem, control rights, control structure, moral hazard, private bene t, separation of ownership and control, soft-budget constraint, strategic delegation |
| JEL: | D86 G34 J31 L22 L26 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:15/02&r=hrm |
| By: | Mark Bryan; Alex Bryson |
| Abstract: | Using data from the British Household Panel Survey (BHPS) we show performance pay (PP) increased earnings dispersion among men and women, and to a lesser extent among full-time working women, in the decade of economic growth which ended with the recession of 2008. PP was also associated with some compression in the lower half of the wage distribution for women. The effects were predominantly associated with a broad measure of PP that included bonuses. However, these effects were modest and there is no indication that PP became increasingly prevalent, as some had predicted, over the decade prior to recession. |
| Keywords: | Wages, wage inequality, performance pay, bonuses |
| JEL: | J31 J33 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1346&r=hrm |
| By: | Bryan Mark; Alex Bryson |
| Abstract: | Using data from the British Household Panel Survey (BHPS) we show performance pay (PP) increased earnings dispersion among men and women, and to a lesser extent among full-time working women, in the decade of economic growth which ended with the recession of 2008. PP was also associated with some compression in the lower half of the wage distribution for women. The effects were predominantly associated with a broad measure of PP that included bonuses. However, these effects were modest and there is no indication that PP became increasingly prevalent, as some had predicted, over the decade prior to recession. |
| Keywords: | Wages; wage inequality; performance pay; bonuses |
| JEL: | J31 J33 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:61701&r=hrm |
| By: | Meier, Stephan (Columbia University); Stephenson, Matthew (Columbia University) |
| Abstract: | Firms exhibit heterogeneity in size, productivity, and internal structure, and this is true even within the same industry. It has been thought since the time of Adam Smith that a firm's internal structure affects its productivity through the channel of gains from specialization. Our paper provides evidence of a link between an organization's culture – specifically the trust environment – and its internal structure. We show experimentally that exogenously imposed culture endogenously leads to variation in organizational form. We prime trust using past performance from a pilot study and demonstrate that the level of trust within an organization affects division of labor and consequently organizational productivity. This evidence is consistent with a cross-country link between trust and the division of labor that we observe in data from the European Social Survey. Our results point to a mechanism that can help explain existing results on the connection between generalized trust and growth. It also points to an important determinant of a firm's internal structure: corporate culture (of trust). |
| Keywords: | trust, division of labor, organizational structure |
| JEL: | C90 D20 D03 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8974&r=hrm |
| By: | Filippin, A.; Crosetto, P. |
| Abstract: | Evidence of Illusion of Control – the fact that people believe to have control over pure chance events – is a recurrent finding in experimental psychology. Results in economics find instead little to no support. In this paper we test whether this dissonant result across disciplines is due to the fact that economists have implemented only one form of illusory control. We identify and separately tests in an incentive-compatible design two types of control: a) over the resolution of uncertainty, as usually done in the economics literature, and b) over the choice of the lottery, as sometimes done in the psychology literature but without monetary payoffs. Results show no evidence of illusion of control, neither on choices nor on beliefs about the likelihood of winning, thus supporting the hypotheses that incentives crowd out illusion of control. |
| Keywords: | ILLUSION OF CONTROL;EXPERIMENT;RISK ELICITATION;HYPOTHETICAL BIAS |
| JEL: | B49 C91 D81 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2015-06&r=hrm |