nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒11‒07
twelve papers chosen by
Patrick Kampkötter
Universität zu Köln

  1. Full versus Partial Delegation in Multi-Task Agency By Barbara Schöndube-Pirchegger; Jens Robert Schöndube
  2. Incentives and Social Preferences: Experimental Evidence from a Seemingly Inefficienct Traditional Labor Contract By Goto, Jun; Sawada, Yasuyuki; Aida, Takeshi; Aoyagi, Keitaro
  3. The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior By Stefan Pichler; Nicolas Ziebarth
  4. Determinants of doctorate holders’ job satisfaction. An analysis by employment sector and type of satisfaction in Spain By J. Oriol Escardíbul; Sergio Afcha
  5. Women on board and performance of family firms: Evidence from India By Jayati Sarkar; Ekta Selarka
  6. Globalization, Chinese Imports, and Skill Premia in a Small Open Economy By Selva Baziki
  7. Drought of Opportunities: Contemporaneous and Long-Term Impacts of Rainfall Shocks on Human Capital By Shah, Manisha; Millett Steinberg, Bryce
  8. Measuring the use of human resources practices and employee attitudes: The linked personnel panel By Kampkötter, Patrick; Mohrenweiser, Jens; Sliwka, Dirk; Steffes, Susanne; Wolter, Stefanie
  9. Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark By Itzik Fadlon; Jessica A. Laird; Torben Heien Nielsen
  10. Competitiveness and the Gender Gap among Young Business Professionals By Reuben, Ernesto; Sapienza, Paola; Zingales, Luigi
  11. Is It Harder for Older Workers to Find Jobs? New and Improved Evidence from a Field Experiment By David Neumark; Ian Burn; Patrick Button
  12. Do Employers Prefer Migrant Workers? Evidence from a Chinese Job Board By Peter Kuhn; Kailing Shen

  1. By: Barbara Schöndube-Pirchegger (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Jens Robert Schöndube (Faculty of Economics and Management, Leibniz University Hannover)
    Abstract: We consider a moral hazard type agency problem. Two tasks need to be performed within the agency. The principal can either delegate both tasks to the agent or perform one of the tasks himself. In the latter case the principal can choose which task to delegate but doing both personally is not feasible. As firm value is not contractible by assumption the incentive contract offered to the agent needs to be based on a possibly non-congruent performance measure. Allowing for both of the players to be risk averse, agency costs can arise from a trade-off in allocating incentives and risk as well as from a congruity problem. While full delegation results in a standard two task agency problem, partial delegation creates a double moral hazard problem as neither the principal can observe the agent’s effort nor vice versa. We find that full delegation is more favorable the more risk is optimally allocated to the agent. Accordingly partial delegation is beneficial if the principal has a relatively low degree of risk aversion. Moreover, full delegation allows the principal to scale incentives provided to the agent but not to fine tune the intensity of incentives for each effort separately. With partial delegation fine tuning is possible but increasing incentives for one effort implies reducing them for the other. If scaling is more effective in minimizing agency costs than fine tuning incentives, the principal tends to prefer full delegation to partial delegation and vice versa.
    Keywords: Delegation, agency problem, congruity, risk sharing
    Date: 2015–11
  2. By: Goto, Jun; Sawada, Yasuyuki; Aida, Takeshi; Aoyagi, Keitaro
    Abstract: This paper investigates the interplay between economic incentives and social norms in formulating rice planting contracts in the Philippines. In our study area, despite the potential for pervasive opportunistic behaviors by workers, a fixed-wage (FW) contract has been dominant for rice planting. To account for the use of this seemingly inefficient contractual arrangement, we adopt a hybrid experimental method of framed field experiments by randomized controlled trials (RCT), in which we randomly assign three distinct labor contracts—FW, individual piece rate (IPR), and group piece rate (GPR)—and artefactual field experiments to elicit social preference parameters. Through analyses of individual workers’ performance data from framed field experiments and data on social preferences elicited by artefactual field experiments, three main empirical findings emerge. First, our basic results show the positive incentive effects in IPR and, equivalently, moral hazard problems in FW, which are consistent with standard theoretical implications. Second, non-monetary incentives seem to play a significant role under FW: while social preferences such as altruism and guilt aversion play an important role in stimulating incentives under FW, introducing monetary incentives crowds out such intrinsic motivations, and other non-monetary factors such as positive peer effects significantly enhance incentives under a FW contract. Finally, as alternative hypotheses, our empirical results are not necessarily consistent with the hypothesis of the interlinked contract of labor and credit transactions in mitigating moral hazard problems, the optimality of FW contract under large effort measurement errors, and the intertemporal incentives arising from performance-based contract renewal probabilities. Hence, considering the interplay of intrinsic motivations and monetary incentives as well as the monetary costs of mitigating moral hazard and free-riding problems through IPR, we may conclude that seemingly perverse traditional contractual arrangements might be socially efficient.
    Keywords: Randomized controlled trials, incentives, social preferences, peer effect, labor contract, field experiments, Labor and Human Capital, D03, C93, D22, C91,
    Date: 2015
  3. By: Stefan Pichler; Nicolas Ziebarth
    Abstract: This paper proposes a test for the existence and degree of contagious presenteeism and negative externalities in sickness insurance schemes. First, we theoretically decompose moral hazard into shirking and contagious presenteeism behavior and derive testable conditions. Then, we implement the test exploiting German sick pay reforms and administrative industry-level data on certiï¬ed sick leave by diagnoses. The labor supply adjustment for contagious diseases is signiï¬cantly smaller than for non-contagious diseases. Lastly, using Google Flu data and the staggered implementation of US sick leave reforms, we show that flu rates decrease after employees gain access to paid sick leave.
    Keywords: sickness insurance, paid sick leave, presenteeism, contagious diseases, infections, negative externalities, shirking, US, Germany
    JEL: I12 I13 I18 J22 J28 J32
    Date: 2015–10
  4. By: J. Oriol Escardíbul (Universitat de Barcelona & IEB); Sergio Afcha (Pontificia Universidad Católica del Perú)
    Abstract: In this study we analyze the determinants of job satisfaction of doctorate holders in Spain. Specifically, we consider overall job satisfaction as well as basic and motivational satisfaction following Herzberg’s typology (based on Maslow’s hierarchy of needs). Using data from the Spanish Survey on Human Resources in Science and Technology of 2009, representative of the Spanish doctoral graduate population, we develop an analysis by gender and institutional sector (university and non-university) where employees are employed. We propose OLS regression to identify the determinants of basic and motivational satisfaction at job as well as an ordered logit model for overall job satisfaction. Results do not allow us to confirm Herzberg’s differentiation for the Spanish PhD holders, since factors related with basic motivation (such as salary or working conditions referred to ‘safety’) have a bearing on all types of job satisfaction (not only the basic one as expected). Likewise, results do not show significant differences by gender. However, it seems that these ‘basic’ needs are less important for the job satisfaction those PhD holders working at the University. Our results seem reasonable for a Southern European country where monetary conditions in labor relations are worse than in other developed countries.
    Keywords: Gender, Herzberg, Maslow, job satisfaction, PhD labor market, Spain
    JEL: I23 J24 J31 J32
    Date: 2015
  5. By: Jayati Sarkar (Indira Gandhi Institute of Development Research); Ekta Selarka (Madras School of Economics)
    Abstract: This paper provides evidence on the effect of women directors on the performance of family firms with a case study of India. Existing literature on the subject has primarily focused on widely held firms, notably in the US. Given that ownership structure and governance environment of family firms are distinctly different from those of non-family firms, the evidence on the relationship between women on board and firm performance in the context of widely held firms may not apply in the context of family firms. India provides an ideal setting for analyzing this question as the presence of family firms is pervasive and since 2013 India has instituted gender quotas on corporate boards. Using a data-set of 10218 firm year observations over a ten year period from 2005 to 2014 which spans the pre-quota and post-quota years, we find robust evidence that women directors on corporate boards positively impact firm value and that this effect increases with the number of women directors on board. However, we find that the positive effect of gender diversity on firm performance weakens with the extent to which the family exerts control through occupying key management positions on the board. In addition, women directors affiliated to the family have no significant effect on firm value, whereas independent women directors do. Our results with respect to profitability are somewhat different; while as in the case of market value, women directors positively impact profitability with the positive effect driven by independent women directors, the effect does not vary with the extent of family control. Taken together, our results suggest that though gender diversity on corporate boards may positively impact firm performance in family firms in general, the extent of family control can have a significant bearing on this relationship. The findings from this study could be instructive for emerging economies like India in promoting gender-based quotas on corporate boards.
    Keywords: board of directors, gender diversity, family ownership and control, gender-quota
    JEL: G32 G34 G38
    Date: 2015–10
  6. By: Selva Baziki (Central Bank of the Republic of Turkey, Banking and Financial Institutions Department)
    Abstract: This paper studies the effect of increased competition from low wage countries on the earnings gap between skilled and unskilled workers by using matched worker-firm micro data covering the total population of workers in private manufacturing firms in Sweden, 1996-2007. Treating Chinese accession into WTO as an exogenous shock to domestic competition, the paper shows that higher Chinese import penetration increases the wage gap between low educated and college educated workers, translating into a rise in wage inequality. Estimations show that the skill wage gap has increased due to a significant increase in the premium for college educated workers. This effect remains even after taking a time trend in the return to college education into account. The effect on high-skilled workers in response to an average of 2.9 percentage point increase in Chinese import penetration is 2.7 percent higher wages. Since real skilled wages have risen about 27 percent in this period, suggesting that rising competition from low-wage countries has contributed to around 10 percent of the increase in skilled wages. Skilled workers appear to be complementary to the goods imported from low-wage countries, and therefore command a higher wage with rising imports from China. Firms may even upgrade their production technologies in response to rising competition from China, which should further increase the demand for and wages of these workers. One of the reasons why wages for non-college workers are not significantly affected by changes in Chinese imports could be due to the institutional setting in Sweden where contracts negotiated with labor unions impose lower limits on wages. The results of the paper differ from previous work by both utilizing a detailed matched employer-employee database and by finding a robust and significant positive effect on the return to college education even after controlling for a time trend in return to education.
    Keywords: Chinese Imports, Wage Dynamics, Import Competition, Skill Premium, Return to Education
    JEL: E24 F16 J24 J31 L60
    Date: 2015
  7. By: Shah, Manisha (University of California, Los Angeles); Millett Steinberg, Bryce (Harvard University)
    Abstract: Higher wages are generally thought to increase human capital production, particularly in the developing world. We introduce a simple model of human capital production in which investments and time allocation differ by age. Using data on test scores and schooling from rural India, we show that higher wages increase human capital investment in early life (in utero to age 2) but decrease human capital from ages 5-16. Positive rainfall shocks increase wages by 2% and decrease math test scores by 2-5% of a standard deviation, school attendance by 2 percentage points, and the probability that a child is enrolled in school by 1 percentage point. These results are long-lasting; adults complete 0.2 fewer total years of schooling for each year of exposure to a positive rainfall shock from ages 11-13. We show that children are switching out of school enrollment into productive work when rainfall is higher. These results suggest that the opportunity cost of schooling, even for fairly young children, is an important factor in determining overall human capital investment.
    Keywords: human capital investment
    JEL: O12 I2 J1
    Date: 2015–10
  8. By: Kampkötter, Patrick; Mohrenweiser, Jens; Sliwka, Dirk; Steffes, Susanne; Wolter, Stefanie
    Abstract: This paper introduces a new data source available for HRM researchers and personnel economists,the Linked Personnel Panel (LPP). The LPP is a longitudinal and representative employer-employee data set covering establishments in Germany and designed for quantitative empirical HR research. The LPP offers a unique structure. First, the data set combines employer and employee surveys that can be matched to each other. Second, it can also be linked to a number of additional administrative data sets. Third, the LPP covers a wide range of firms and workers from different backgrounds. Finally, because of its longitudinal dimension, the LPP should facilitate the study of causal effects of HR practices. The LPP employee survey uses a number of established scales to measure job characteristics and job perceptions, personal characteristics, employee attitudes towards the organisation and employee behaviour. This paper gives an overview of both the employer and employee survey and outlines the definitions, origins and statistical properties of the scales used in the individual questionnaire.
    Keywords: HR practices,matched employer-employee data,Linked Personnel Panel,employee attitudes
    Date: 2015
  9. By: Itzik Fadlon; Jessica A. Laird; Torben Heien Nielsen
    Abstract: This paper studies how firms set contributions to employer-provided 401(k)-type pension plans. Using a reform that decreased the subsidy for contributions to capital pension accounts for Danish workers in the top income tax bracket, we provide strong evidence that employers' contributions are based on their employees' savings preferences. We find an immediate decrease in employer contributions to capital accounts, whose magnitude increased in the share of employees directly affected by the reform. This response was large relative to average employee responses within private IRA-type plans and was accompanied by a similar-magnitude shift of employer contributions to annuity accounts.
    JEL: J30 J32 J33
    Date: 2015–10
  10. By: Reuben, Ernesto (Columbia University); Sapienza, Paola (Northwestern University); Zingales, Luigi (University of Chicago)
    Abstract: Important gender differences in earnings and career trajectories persist. Particularly, in professions such as business. Gender differences in competitiveness have been proposed as a potential explanation. Using an incentivized measure of competitiveness, this paper investigates whether competitiveness explains future gender differences in earnings and industry choice in a sample of high-ability MBA graduates. We find that competitive individuals earn 9% more than their less competitive counterparts do. Moreover, gender differences in competitiveness explain around 10% of the overall gender gap. We also find that competitive individuals are more likely to work in high-paying industries nine years later, which suggests that the relation between competitiveness and earnings persists in the long run. Lastly, we find that the competitiveness gap in industry emerges over time when MBAs and firms interact with each other.
    Keywords: gender gap, gender differences, competitiveness, business career
    JEL: J16 D81 D84 I21 C93
    Date: 2015–10
  11. By: David Neumark; Ian Burn; Patrick Button
    Abstract: We design and implement a large-scale field experiment – a resume correspondence study – to address a number of potential limitations of existing field experiments testing for age discrimination, which may bias their results. One limitation that may bias these studies towards finding discrimination is the practice of giving older and younger applicants similar experience in the job to which they are applying, to make them “otherwise comparable.” The second limitation arises because greater unobserved differences in human capital investment of older applicants may bias existing field experiments against finding age discrimination. We also study ages closer to retirement than in past studies, and use a richer set of job profiles for older workers to test for differences associated with transitions to less demanding jobs (“bridge jobs”) at older ages. Based on evidence from over 40,000 job applications, we find robust evidence of age discrimination in hiring against older women. But we find that there is considerably less evidence of age discrimination against men after correcting for the potential biases this study addresses.
    JEL: J14 J26 J7 K31
    Date: 2015–10
  12. By: Peter Kuhn; Kailing Shen
    Abstract: We study urban, private sector Chinese employers’ preferences between workers with and without a local permanent residence permit (hukou) using callback information from an Internet job board. We find that these employers prefer migrant workers to locals who are identically matched to the job’s requirements; these preferences are strongest in jobs requiring lower levels of education and offering low pay. While migrant-native payroll tax differentials might account for some of this gap, we argue that the patterns are hard to explain without some role for a migrant productivity advantage in less skilled jobs. Possible sources of this advantage include positive selection of nonlocals into migration, negative selection of local workers into formal search for unskilled private sector jobs, efficiency wage effects related to unskilled migrants’ limited access to the urban social safety net, and intertemporal labor and effort substitution by temporary migrants that makes them more desirable workers.
    JEL: J71 O15 R23
    Date: 2015–10

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