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on Human Capital and Human Resource Management |
| By: | Kato, Takao (Colgate University); Kodama, Naomi (Hitotsubashi University) |
| Abstract: | This paper uses unique firm-level panel data from Japan and provides new evidence on the possible impact on gender equality in the workplace of human resources management (HRM) practices. Specifically we consider a number of work-life balance (WLB) practices that are developed in part to enhance gender equality as well as performance-related pay (PRP) that is one of the most often discussed changes in the Japanese HRM system in recent years. Our fixed effect estimates indicate that daycare service assistance (onsite daycare services and daycare service allowances) has a gradual yet significant positive effect on the share of women in the firm's core labor force and the proportion of female directors. However, transition period part-time work is found to result in a decrease in the proportion of female directors (or exacerbating gender inequality in management). Turning to PRP, the fixed effect estimates suggest that a switch from the traditional wage system that rewards workers for their long-term skill development through on-the-job training within the firm to PRP that makes pay more sensitive to shorter-term performance will result in a fall in the proportion of female directors. We also find that the adverse effect on gender equality of PRP is fully mediated by having a more objective performance evaluation system; a more transparent decision making process; and a more systematic, explicit and formal training program. This finding can be interpreted as evidence pointing to gender discrimination in the workplace. In designing, developing and revising public policy instruments to achieve Prime Minister Shinzo Abe's ambitious policy goal of "increasing the share of women in leadership positions to at least 30% by 2020 in all fields in society," policy makers may need to pay particular attention to heterogeneous efficacy of specific WLB practices and the adverse effect of PRP as well as the mediating role played by management by objectives (MBO), information sharing, and systematic training program. |
| Keywords: | work-life balance, performance-related pay, pay for performance, HRM practices, gender equality, gender diversity, Japan |
| JEL: | M5 J16 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9379&r=all |
| By: | Pablo Hernandez (New York University AD); Dylan Minor (Harvard Business School, Strategy Unit); Dana Sisak (Erasmus University Rotterdam) |
| Abstract: | We experimentally study ways in which the social preferences of individuals and groups affect performance when faced with relative incentives. We also identify the mediating role that communication and leadership play in generating these effects. We find other-regarding workers tend to depress efforts by 15% on average. However, selfish workers are nearly three times more likely to lead workers to coordinate on minimal efforts when communication is possible. Hence, the other-regarding composition of a team of workers has complex consequences for organizational performance. |
| Keywords: | Social Preferences, Relative Performance, Collusion, Leadership |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:16-040&r=all |
| By: | Carrillo-Tudela, Carlos (University of Essex); Kaas, Leo (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 abilities, 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: | D82 J63 J64 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9367&r=all |
| By: | Geoffrey Tate; Liu Yang |
| Abstract: | Internal labor markets facilitate cross-industry worker reallocation and collaboration, and the resulting benefits are largest when the markets include industries that utilize similar worker skills. We construct a matrix of industry pair-wise human capital transferability using information obtained from more than 11 million job changes. We show that diversifying acquisitions occur more frequently among industry pairs with higher human capital transferability. Such acquisitions result in larger labor productivity gains and are less often undone in subsequent divestitures. Moreover, acquirers retain more high skill workers and they exploit the real option to move workers from the target firm to jobs in other industries inside the merged firm. Overall, our results identify human capital as a source of value from corporate diversification and provide an explanation for seemingly unrelated acquisitions. |
| Keywords: | Corporate Diversification, Mergers and Acquisitions, Internal Labor Markets, Worker Mobility, Human Capital Transferability |
| JEL: | G34 J24 J62 M51 M54 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:15-31&r=all |
| By: | Bond, Timothy N. |
| Abstract: | Traditional models of promotion have difficulty explaining why many firms do not favor internal employees for advancement. I develop a new model to explain this phenomenon. My model generates an equilibrium where some, but not all, ex ante identical firms recruit strictly internally. These firms employ higher quality entry-level workers, since they hire supervisors exclusively from their lower ranks. The scarcity of high-quality workers limits the use of this strategy. I derive several testable predictions on wage-tenure profile differences across firms with varying recruitment practices and confirm these predictions using matched employer-employee data from the United Kingdom. |
| Keywords: | promotion; internal labor markets; personnel |
| JEL: | J30 M51 |
| Date: | 2011–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67125&r=all |
| By: | Pouliakas, Konstantinos (European Centre for the Development of Vocational Training (Cedefop)); Russo, Giovanni (European Centre for the Development of Vocational Training (Cedefop)) |
| Abstract: | We use information from the new OECD Survey of Adult Skills (PIAAC) to investigate the link between job tasks and cognitive skill demand in 22 advanced economies. Skill demand is operationalized by the assessed literacy and numeracy skills of workers with well-matched skills to their job duties. Jobs are categorised according to the nature of tasks, including the intensity of abstract reasoning, employee latitude, interactivity or manual work. The analysis confirms the significant relation between task complexity and higher skill needs. The significant relation holds independently of the endogenous supply of formal human capital, occupational or industrial structure and other job or individual characteristics. The results confirm the (indirect) mapping between tasks and skills as predicted by the task approach to labour economics. Given the marked heterogeneity in workplace practices adopted by employers, it is clear that enterprise level workplace development policies are warranted as enablers of skills matching and higher labour productivity. |
| Keywords: | skills, tasks, skill demand, job complexity, PIAAC, mismatch |
| JEL: | J24 M12 M54 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9392&r=all |
| By: | Schymik, Jan Simon |
| Abstract: | Do international trade and technological change influence how firms create incentives for human capital? I present a model that incorporates agency problems into a framework with firm heterogeneity and human capital. My model indicates that trade liberalizations and skill-biased technological change alter the way how the largest firms in an economy incentivize their managers. Increases in managerial reservation wages lead to a reduction in corporate governance investments and a rise in performance compensation since monitoring managers becomes less efficient. Using data on CEO compensation and entrenchment opportunities in public industrial firms in the U.S., I document strong empirical regularities in support of the model predictions. Firms allow for more managerial entrenchment and offer larger CEO compensation when their industries become more open to trade or when production becomes more I.T. intensive. |
| Keywords: | International Trade and Firm Organization; Agency Problems in International Trade; Endogenous Managerial Entrenchment; Corporate Governance and CEO Compensation |
| JEL: | F1 F16 G34 J33 L22 O33 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:525&r=all |
| By: | Sheilagh Ogilvie and Markus Küpker |
| Abstract: | Modern growth models view human capital, particularly education, as central to economic growth. But historical evidence has proved elusive. This paper investigates human capital levels in Württemberg, a late-developing German economy, between 1610 and 1899. Württemberg achieved higher and more universal literacy than any other European economy before 1800. A multivariate analysis reveals that this exceptional level of human capital in Württemberg was largely decoupled from economic variables from a very early date. Literacy declined significantly with individuals’ age, suggesting that education was irrelevant to economic life. The Württemberg human capital miracle was unrelated to economic growth or human development indicators, casting doubt on theories that ascribe education a central role in economic growth. economic history; human |
| Keywords: | capital; education; growth; Germany |
| JEL: | N33 E24 J24 O15 |
| Date: | 2015–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1528&r=all |
| By: | Minchul Yum (Ohio State University) |
| Abstract: | A large literature has documented low intergenerational mobility in the U.S. over the last few decades, prompting a growing interest in understanding mechanisms underlying intergenerational mobility. In this paper, I construct a quantitative general equilibrium model that explores parental time investment in preschool-aged and younger children as a channel through which economic status can be transmitted intergenerationally. Altruistic parents differ in their own human capital and assets, and in the human capital of their children. They each decide how to split their time across investment in their child's human capital, market work, and leisure. My calibrated model reproduces several measures of intergenerational income mobility, as well as the lifecycle inequality seen in U.S. data. Decomposing its results, I find that the parental time investment channel accounts for nearly 50 percent of the observed persistence in intergenerational income. Despite their higher opportunity costs of time, more skilled parents choose to invest more time in their young children. This force significantly amplifies the intergenerational correlation of human capital. However, at the same time, I find that the parental time investment channel actually reduces the cross-sectional dispersion of human capital. This result is driven by dynastic smoothing of the marginal value of human capital; individuals insure their descendants' lifetime utilities through the parental investment channel by investing more time in less able children. Finally, policy experiments suggest that interventions targeted at the college decision have little effect on intergenerational mobility. By contrast, I find that those targeted at parental time investment decisions, such as a proportional subsidy for such investments, may be an effective way to increase intergenerational mobility as well as social welfare, since they disproportionately raise investment in the children from disadvantaged families. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:996&r=all |
| By: | Brice Corgnet (Economic Science Institute & Argyros School of Business and Economics, Chapman University); Mark DeSantis (Economic Science Institute & Argyros School of Business and Economics, Chapman University); David Porter (Economic Science Institute & Argyros School of Business and Economics, Chapman University) |
| Abstract: | We study the determinants of individual trader performance by conducting a comprehensive analysis of a broad range of variables that have been studied separately in different strands of the literature (financial literacy, cognitive skills, behavioral biases and the theory of mind). We utilize an experimental trading environment that allows us to control information flows into the market and measure a large set of individual characteristics. We show that behavioral biases (such as overconfidence and the failure to understand random sampling) significantly explain trader performance whereas standard cognitive and theory of mind skills only have a marginal effect. These results support the recent effort to incorporate Behavioral Finance research findings into the financial training curriculum. |
| Keywords: | Experimental asset markets, behavioral finance, cognitive ability, financial education |
| JEL: | C92 G02 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:15-17&r=all |