nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒07‒25
sixteen papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. Intrinsically Motivated Agents in Teams By Ester Manna
  2. Inflated reputations: leniency & moral wiggle room in trader feedback systems By Gary E. Bolton; David J. Kusterer; Johannes Mans
  3. Leadership with Individual Rewards and Punishments By Gürerk, Özgür; Lauer, Thomas; Scheuermann, Martin
  4. How does Part-time Work Affect Firm Performance and Innovation Activity? By Kira Pauka
  5. Peer Effects and Incentives By Matthias Kräkel
  6. Not Working At Work: Loafing, Unemployment and Labor Productivity By Burda, Michael C; Genadek, Katie R.; Hamermesh, Daniel S.
  7. Does Worker Wellbeing Affect Workplace Performance? By Alex Bryson; John Forth; Lucy Stokes
  8. Tenure, Experience, Human Capital and Wages: A Tractable Equilibrium Search Model of Wage Dynamics By Jesper Bagger; François Fontaine; Fabien Postel-Vinay; Jean-Marc Robin
  9. Learning and (or) Doing: Human Capital Investments and Optimal Taxation By Stefanie Stantcheva
  10. Contemporary Trends in Further Corporate Education and Training By Marta Matul; Daniela Breveníková
  11. Long Run Effects of Temporary Incentives on Medical Care Productivity By Pablo Celhay; Paul Gertler; Paula Giovagnoli; Christel Vermeersch
  12. Human Capital Risk, Contract Enforcement, and the Macroeconomy By Tom Krebs; Moritz Kuhn; Mark Wright
  13. Board Size and Firm Value: Evidence from Australia By Pascal Nguyen; Nahid Rahman; Alex Tong; Ruoyun Zhao
  14. Which explanations for gender differences in competition are consistent with a simple game theoretic model? By Christopher Cotton; Cheng Li; Frank McIntyre; Joseph Price
  15. Silence is Golden:  Communication Costs and Team Problem Solving By Charness, Gary; Cooper, David; Grossman, Zachary
  16. Civic capital and the Vertical Integration of Service Provision: Evidence from Italy. By M. Bürker; G. A. Minerva

  1. By: Ester Manna (Facultat d'Economia i Empresa; Universitat de Barcelona (UB))
    Abstract: I develop a principal-agent model where a profit-maximizing principal employs two agents to undertake a project. The employees differ in terms of their intrinsic motivation towards the project and this is their private information. I analyze the impact of individual and team incentives on the screening problem of employees with different degrees of motivation within teams. If the principal conditions each agent's wage on his own level of effort (individual incentives), an increase of the rents paid to the motivated agents results in a lower level of effort exerted by all agents in the second-best. In this case, reversal incentives occur. Conversely, reversal incentives do not arise if the principal uses team-incentives. If the principal conditions each agent's wage on the effort of both agents and the agent's performance on the effort of his colleague (team-incentives), motivated agents exert the same level of effort as in the first-best.
    Keywords: Intrinsically Motivated Agents, Team Production, Adverse Selection, Individual and team incentives, Reversal Incentives.
    JEL: D03 D82 M54
    Date: 2015
  2. By: Gary E. Bolton (UT Dallas); David J. Kusterer (University of Cologne); Johannes Mans (University of Cologne)
    Abstract: Reputation systems associated with Internet markets are known to be subject to strategic manipulation. The experiment we present suggests that this manipulation can extend to factors that have heretofore been overlooked: the leniency and moral wiggle room that arise from uncertainty about the source of transaction problems. Uncertainty about seller culpability leads to behaviors that reduce the informativeness of the feedback system, thereby diminishing the incentives for honest seller behavior. Under uncertainty, buyers pay about the same prices but get significantly less.
    Keywords: reputation, trust, leniency bias, electronic markets, experimental economics
    JEL: C9 D4
    Date: 2015–05–20
  3. By: Gürerk, Özgür; Lauer, Thomas; Scheuermann, Martin
    Abstract: In a public goods experiment, leaders with reward or punishment power induce higher team cooperation compared to leader-free teams without any reward or punishment possibilities. When equipped with reward or punishment instruments, however, leader-free teams perform as well as teams with leaders.We conclude that the instruments as such are more effective in fostering cooperation than a leader.
    Keywords: Leadership, Public Goods, Punishment, Reward
    JEL: C92 H41 M5
    Date: 2015–07–17
  4. By: Kira Pauka (University of Basel)
    Abstract: This paper analyzes how part-time work affects financial and innovative firm performance. Moreover, it provides a detailed examination of part-time work by defining three different forms of part-time work (large, medium and small part-time work) depending on weekly working hours. Considering human capital theory, I expect part-time workers to have lower work experience and to accumulate less human capital. Thus I hypothesize that part-time work affects both, financial and innovative firm performance, negatively. For the empirical investigation I use a large German firm-level data set. The analysis shows that increasing part-time work has a significant negative impact on financial firm performance. Specifically, there are differences with regard to the considered categories of part-time work. Part-time workers having the fewest working hours per week have the strongest negative impact on financial firm performance. However the negative effect of part-time work does not remain for innovative firm performance. The results show no significant difference between part-time and full-time workers in their impact on innovative firm performance.
    Keywords: part-time work, financial firm performance, innovation
    JEL: J21 L25 M50
    Date: 2015
  5. By: Matthias Kräkel
    Abstract: In a multi-agent setting, individuals often compare own performance with that of their peers. These comparisons in?uence agents? incentives and lead to a noncooperative game, even if the agents have to complete independent tasks. I show that depending on the interplay of the peer effects, agents?efforts are either strategic complements or strategic substitutes. I solve for the optimal monetary incentives that complement the peer effects and show that the principal prefers sequential effort choices of the agents to choosing efforts simultaneously.
    Keywords: externalities, moral hazard, other-regarding preferences
    JEL: C72 D03 D86
    Date: 2014–10
  6. By: Burda, Michael C; Genadek, Katie R.; Hamermesh, Daniel S.
    Abstract: Using the American Time Use Survey (ATUS) 2003-12, we estimate time spent by workers in non-work while on the job. Non-work time is substantial and varies positively with the local unemployment rate. While the average time spent by workers in non-work conditional on any positive non-work rises with the unemployment rate, the fraction of workers who report time in non-work varies pro-cyclically, declining in recessions. These results are consistent with a model in which heterogeneous workers are paid efficiency wages to refrain from loafing on the job. That model correctly predicts relationships of the incidence and conditional amounts of non-work with wage rates and measures of unemployment benefits in state data linked to the ATUS, and it is consistent with observed occupational differences in non-work.
    Keywords: efficiency wage; labor productivity; loafing; non-work; shirking; time use
    JEL: E24 J22
    Date: 2015–07
  7. By: Alex Bryson; John Forth; Lucy Stokes
    Abstract: This paper uses linked employer-employee data to investigate the relationship between employees' subjective well-being and workplace performance in Britain. The analyses show a clear, positive and statistically-significant relationship between the average level of job satisfaction at the workplace and workplace performance. This finding is present in both cross-sectional and panel analyses and is robust to various estimation methods and model specifications. In contrast, we find no association between levels of job-related affect and workplace performance.
    Keywords: Subjective well being, job satisfaction, job-related affect, workplace performance
    JEL: J28
    Date: 2015–07
  8. By: Jesper Bagger; François Fontaine (Bureau d'économie théorique et appliquée); Fabien Postel-Vinay (Departement d'Economie de Sciences Po); Jean-Marc Robin (Département d'économie)
    Abstract: We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity and individual-level shocks. Wage growth is decomposed into contributions of human capital and job search, within and between jobs. Human capital accumulation is largest for highly educated workers. The contribution from job search to wage growth, both within- and between-job, declines over the first ten years of a career – the ‘job-shopping’ phase of a working life – after which workers settle into high-quality jobs using outside offers to generate gradual wage increases, thus reaping the benefits from competition between employers.
    Keywords: Human capital accumulation; Wage growth; Labor market competition
    JEL: J24 J31 J63 J64
    Date: 2014–06
  9. By: Stefanie Stantcheva
    Abstract: This paper considers a dynamic taxation problem when agents can allocate their time between working and investing in their human capital. Time investment in human capital, or "training," increases the wage and can interact with an agent's intrinsic, exogenous, and stochastic earnings ability. It also interacts with both current and future labor supply and there can be either "learning-and-doing" (when labor and training are complements, like for on-the-job training) or "learning-or-doing" (when labor and training are substitutes, like for college). Agents' abilities and labor supply are private information to them, which leads to a dynamic mechanism design problem with incentive compatibility constraints. At the optimum, the subsidy on training time is set so as to balance the total labor supply effect of the subsidy and its distributional consequences. In a one-period version of the model, particularly simple relations arise at the optimum between the labor wedge and the training wedge that can also be used to test for the Pareto efficiency of existing tax and subsidy systems. In the limit case of learning-by-doing (when training is a direct by-product of labor) or in the case in which agents who are more able at work are also more able at training, there are important modifications to the labor wedge.
    JEL: H21 H23 H24 H53 J24
    Date: 2015–07
  10. By: Marta Matul (University of Economics in Bratislava); Daniela Breveníková (University of Economics in Bratislava)
    Abstract: Management of further corporate education is an important part of human resources development HRD) in an organisation. Its aim is to ensure the development of human resources by means of applying methods of innovative education, the focus of which is on the effective improvement of work performance. Motivating employees and developing a highly efficient education system leads to high performance, increase in employees’ knowledge and skills, and satisfying customer needs. The aim of the present paper is to describe methods of education applied in real-life conditions of Slovak enterprises and characterise employee attitudes to further corporate education, currently most frequently applied methods in further corporate education, e.g. coaching, mentoring, action learning, teamworking or case studies.The paper is a partial result of the authors’ output from third stage the research project KEGA 006EU-4/2013 –
    Keywords: Human resource development (HRD), corporate education, coaching, mentoring, case studies, motivation, work performance.
    JEL: I29 J24 I25
  11. By: Pablo Celhay; Paul Gertler; Paula Giovagnoli; Christel Vermeersch
    Abstract: The adoption of new clinical practice patterns by medical care providers is often challenging, even when they are believed to be both efficacious and profitable. This paper uses a randomized field experiment to examine the effects of temporary financial incentives paid to medical care clinics for the initiation of prenatal care in the first trimester of pregnancy. The rate of early initiation of prenatal care was 34% higher in the treatment group than in the control group while the incentives were being paid, and this effect persisted at least 24 months or more after the incentives ended. These results are consistent with a model where the incentives enable providers to address the fixed costs of overcoming organizational inertia in innovation, and suggest that temporary incentives may be effective at motivating improvements in long run provider performance at a substantially lower cost than permanent incentives.
    JEL: I11 I13 I15
    Date: 2015–07
  12. By: Tom Krebs (Universitat Mannheim); Moritz Kuhn (University of Bonn); Mark Wright (University of California, Los Angeles)
    Abstract: We use data from the Survey of Consumer Finance and Survey of Income Program Participation to show that young households with children are under-insured against the risk that an adult member of the household dies. We develop a tractable macroeconomic model with human capital risk, age-dependent returns to human capital investment, and endogenous borrowing constraints due to the limited pledgeability of human capital. We show analytically that, consistent with the life insurance data, in equilibrium young households are borrowing constrained and under-insured. A calibrated version of the model can quantitatively account for the life-cycle variation of life-insurance holdings, financial wealth, earnings, and consumption inequality observed in the US data. Our analysis implies that a reform that makes consumer bankruptcy more costly, like the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, leads to a substantial increase in the volume of both credit and insurance.
    Keywords: human capital risk, limited enforcement, life insurance
    JEL: E21 E24 D52 J24
    Date: 2015–07
  13. By: Pascal Nguyen; Nahid Rahman (Finance Discipline Group, UTS Business School, University of Technology, Sydney); Alex Tong; Ruoyun Zhao (Finance Discipline Group, UTS Business School, University of Technology, Sydney)
    Abstract: We study the effect of board size on firm value in Australia. Using a large sample of Australian firms over the period 2001-2011, we find strong evidence of a negative relationship. We show that firms with a large board are associated with CEO compensation that is sensitive to firm size, but not to firm performance. This incentive to accumulate assets is congruent with the fact that firms with a large board also exhibit lower operating performance and higher operating costs. Furthermore, we find that the effect of board size is stronger in small firms. This result might explain why earlier studies, which focused on large Australian firms, found board size to have little impact on firm value.
    Keywords: board of directors; corporate governance; firm performance; CEO compensation
    JEL: G30 G31 G32 G34
    Date: 2015–07–01
  14. By: Christopher Cotton (Queen's University); Cheng Li (Mississippi State University); Frank McIntyre (Rutgers University); Joseph Price (Brigham Young University)
    Abstract: A number of recent studies show that males may increase their performance by more than females in response to competitive incentives. The literature suggests that such a male competitive advantage may contribute to observed gender gaps in labor force pay and achievement. Understanding which factors may be driving these gender differences is essential for designing policies that promote quality. Using a game theoretic model of contests, we consider a variety of explanations for the male competitive advantage that have been proposed in the empirical and experimental literature. Comparing the testable predictions of the model with the empirical evidence from past papers, we reject explanations involving male over-confidence, misperceptions about relative ability, and some types of preference differences. Explanations involving female under-confidence and differences in risk aversion are consistent with the significant evidence. Two explanations provide perfect matches to observed performance patterns: (i) males are better than females at handling competitive pressure, and (ii) males enjoy competition more or have greater desire to win than females.
    Keywords: contests, gender differences, competitive incentives
    JEL: D74 J16 J24 J78
    Date: 2015–05
  15. By: Charness, Gary; Cooper, David; Grossman, Zachary
    Abstract: Numerous studies have compared the performance of individuals and teams at solving intellective problems.  The ubiquitous finding in the economics literature is that teams out-perform individuals.  This result is intuitively appealing, as teams can benefit from sharing insights.  We analyze experiments comparing the performance of teams and individuals at solving a series of challenging logic puzzles.  Contrary to the existing literature, individuals meet or exceed the performance of teams on all measures.  If we impose a small cost of communication on teams, the performance of teams improves to closely resemble the performance of individuals.  Underlying these results is a definite negative relationship between frequency of communication and team performance.  We also document a strong gender effect.  Teams with more women perform considerably better even though men slightly outperform women when solving the puzzles individually.
    Keywords: Social and Behavioral Sciences, teams, communication, experimental economics
    Date: 2015–07–20
  16. By: M. Bürker; G. A. Minerva
    Abstract: This paper studies whether civic capital acts an effective restraint against opportunistic behavior in transactions, looking at the degree of outsourcing to external suppliers of services in Italian firms. Our results show that, on average, firms tend to outsource more services where civic capital is higher. This effect is particularly strong for firms operating in industries where businesses can easily adjust the level of purchased services to their idiosyncratic needs. To address the issue of endogeneity we also instrument the current stock of civic capital by historical variables. We argue that the rise in the propensity to engage in transactions with outside service suppliers is evidence of a decrease in the opportunistic behavior between the parties involved in the transaction.
    Keywords: Civic Capital; Opportunism; Vertical Integration; Service outsourcing; Transaction Cost Economics
    JEL: Z13 L23 A13 D23
    Date: 2015

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