nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒11‒21
sixteen papers chosen by
Patrick Kampkötter
Universität zu Köln

  1. Job history, work attitude, and employability By Alain Cohn; Michel André Maréchal; Frédéric Schneider; Roberto A. Weber
  2. Job Satisfaction and Employee Turnover: A Firm-level Perspective By Frederiksen, Anders
  3. The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior By Stefan Pichler; Nicolas R. Ziebarth
  4. How are work-related characteristics linked to sickness absence and presenteeism? Theory and data By Arnold, Daniel; De Pinto, Marco
  5. Sleep and Human Capital: Evidence from Daylight Saving Time By Jin, L.;; Ziebarth, N.R.;
  6. CEO turnover and relative performance evaluation By Dirk Jenter; Fadi Kanaan
  7. Incentives and Social Preferences: Experimental Evidence from a Seemingly Inefficient Traditional Labor Contract By Goto, Jun; Sawada, Yasuyuki; Aida, Takeshi; Aoyagi, Keitaro
  8. Social Distance and Control Aversion: Evidence from the Internet and the Laboratory By Katrin Schmelz; Anthony Ziegelmeyer
  9. Optimal Dynamic Contracts for a Large-Scale Principal-Agent Hierarchy: A Concavity-Preserving Approach By Christopher W. Miller; Insoon Yang
  10. Role of Human Resource Practices in Absorptive Capacity and R&D Cooperation By Ipsita Roy
  11. Bilingual Schooling and Earnings: Evidence from a Language-in-Education Reform By Lorenzo Cappellari; Antonio Di Paolo
  12. Multitask Agents and Incentives: The Case of Teaching and Research for University Professors By Marta De Philippis
  13. Gender and the Effect of Working Hours on Firm-Sponsored Training By Picchio, Matteo; van Ours, Jan
  14. Grit Trumps Talent? An experimental approach By Leonie; Christina Gravert
  15. Centralized vs. Decentralized Management: an Experimental Study By Jordi Brandts; David J. Cooper
  16. Employment Polarization in Germany: Role of Technology, Trade and Human Capital By Ipsita Roy; Davide Consoli

  1. By: Alain Cohn; Michel André Maréchal; Frédéric Schneider; Roberto A. Weber
    Abstract: We study whether employment history can provide information about a worker’s noncognitive skills—in particular about “work attitude,” or the ability to work well and cooperatively with others. Our hypothesis is that, holding all else equal, a worker’s frequent job changes can indicate poorer work attitude, and that this information is transmitted in labor markets through employment histories. We provide support for this hypothesis across three studies that employ complementary lab, field, and survey experiments. First, using a laboratory labor market in which the only valuable characteristic of workers is their reliability in complying with an employer’s effort requests, we demonstrate that prior employment information allows employers to screen for such reliability and allows high-reliability workers to obtain better employment outcomes. Second, we conduct a field experiment in which we vary the frequency of job changes in fictitious job applicants’ resumes. Those applicants with fewer job changes receive more callbacks from prospective employers. A third survey experiment with human resource professionals confirms that the resume manipulations in the field study create different perceptions of work attitude and that these account for the callback differences. Our work highlights the potential importance of job history as a signal of worker characteristics, and points to a cost for workers of frequent job changes.
    Keywords: Employability; work attitude; job mobility
    JEL: C90 C93 J01 E24
    Date: 2015–11
  2. By: Frederiksen, Anders
    Abstract: In this paper, I study an employment situation where the employer and the employees cooperate about the implementation of a job satisfaction survey. Cooperation is valuable because it improves the firm's ability to predict employee quits, but it is only an equilibrium outcome because the employer-employee relation is repeated and long-term. Using a unique combination of firm-level data and information from job satisfaction surveys, the empirical analysis reveals that the cooperation reduces the firm's employee turnover costs significantly by improving its ability to predict quits. This cost reduction may easily exceed the cost of conducting the survey. The analysis also reveals that the firm is willing to sacrifice profits in a given year to be able to sustain the cooperative relationship with the employees.
    Keywords: quits, job satisfaction, cooperation, retention
    JEL: M5
    Date: 2015–07
  3. By: Stefan Pichler (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Nicolas R. Ziebarth (Cornell University)
    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 certified sick leave by diagnoses. The labor supply adjustment for contagious diseases is significantly 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: 2015–09
  4. By: Arnold, Daniel; De Pinto, Marco
    Abstract: This paper investigates how changes in work-related factors affect workers' absence and presenteeism behavior. Previous studies (implicitly) assume that there is a substitutive relationship, i.e. a change in a work-related factor decreases the level of absence and simultaneously increases presenteeism (or vice versa). We set up a theoretical model in which work-related characteristics not only affect a worker's absence decision but also the individual-specific sickness definition. Since workrelated factors affect presenteeism through these two channels, nonsubstitutive relationships between absence and presenteeism are also conceivable. Using European cross-sectional data, we find only few substitutive and complementary relationships, while the bulk of the work-related characteristics is related only to one of the two sickness states.
    Keywords: sickness absence,presenteeism,annual duration,workrelated characteristics,health at work
    JEL: J22 J28 I1 M50
    Date: 2015
  5. By: Jin, L.;; Ziebarth, N.R.;
    Abstract: This paper is one of the first to test for a causal relationship between sleep and human capital. It exploits the quasi-experimental nature of Daylight Saving Time (DST), up to 3.4 million BRFSS respondents from the US, and all 160 million hospital admissions from Germany over one decade. We find evidence of mild negative health effects when clocks are set forward one hour in spring. When clocks are set back one hour in fall, effectively extending sleep duration for the sleep deprived by one hour, sleep duration and selfreported health increase and hospital admissions decrease significantly for four days.
    Keywords: sleep; human capital; Daylight Saving Time (DST); BRFSS; hospital admissions; sleep deprivation;
    JEL: H41 I18 I31
    Date: 2015–10
  6. By: Dirk Jenter; Fadi Kanaan
    Abstract: This paper shows that CEOs are fired after bad firm performance caused by factors beyond their control. Standard economic theory predicts that corporate boards filter out exogenous industry and market shocks from firm performance before deciding on CEO retention. Using a hand-collected sample of 3,365 CEO turnovers from 1993 to 2009, we document that CEOs are significantly more likely to be dismissed from their jobs after bad industry and, to a lesser extent, after bad market performance. A decline in industry performance from the 90th to the 10th percentile doubles the probability of a forced CEO turnover.
    JEL: F3 G3
    Date: 2015–10
  7. 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 nonmonetary 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
    JEL: D03 C93 D22 C91
    Date: 2015–03
  8. By: Katrin Schmelz; Anthony Ziegelmeyer
    Abstract: We test experimentally whether monitoring is less likely to reduce work motivation in distant than in close principal-agent relationships. Employing the same standard subject pool of students, we compare a laboratory and an internet implementation of an experimental principal-agent game where the principal can impose control at two different levels on the agent. Agency relationships are arguably more distant in the internet than in the laboratory setting. We find that differences in agents' effort due to an increase in the level of control are larger in the internet than in the laboratory experiment. The effect is driven by both higher intrinsic motivation and stronger control aversion in the laboratory. Agents' effort differences are fairly stable over time in both experiments which indicates that even experienced agents react more negatively to the implementation of control in the laboratory than on the internet.
    Keywords: Control, Crowding effects of control, Internet, Motivation, Social distance, Workplace arrangements
    Date: 2015
  9. By: Christopher W. Miller; Insoon Yang
    Abstract: We present a continuous-time contract whereby a top-level player can incentivize a hierarchy of players below him to act in his best interest despite only observing the output of his direct subordinate. This paper extends Sannikov's approach from a situation of asymmetric information between a principal and an agent to one of hierarchical information between several players. We develop an iterative algorithm for constructing an incentive compatible contract and define the correct notion of concavity which must be preserved during iteration. We identify conditions under which a dynamic programming construction of an optimal dynamic contract can be reduced to only a one-dimensional state space and one-dimensional control set, independent of the size of the hierarchy. In this sense, our results contribute to the applicability of dynamic programming on dynamic contracts for a large-scale principal-agent hierarchy.
    Date: 2015–06
  10. By: Ipsita Roy (Graduate College "The Economics of Innovative Change", Friedrich Schiller University Jena, and Max Planck Institute of Economics.)
    Abstract: While significant attention is given to the concept of absorptive capacity as a source of competitive advantage in firms, a major drawback exists in the way it is unidimensionally defined in micro-level analysis. The paper addresses this limitation and reconceptualizes absorptive capacity as a strategic human resource construct in firms, which in turn, provide important conditions for R&D cooperation and innovation. I begin by providing a "beyond-R&D" definition of absorptive capacity constituting employment practices and incentive-based compensation programs. Next, I exploit the relationship between these practices and heterogeneity in firms' R&D cooperation and partner selection strategies distinguishing between different types of external collaboration partners- horizontal, institutional and consulting-based. Further, I examine the impact of such cooperative R&D on incremental product, process and radical innovation. Employing the IAB Establishment Panel Survey on about 1200 German innovation-based establishments during 2007-2011, findings demonstrate that adoption of employment practices positively affects R&D cooperation irrespective of the type of collaboration partner, while compensation programs positively affect only horizontal R&D cooperation. Significant differences in the patterns of research collaboration are found between manufacturing and service sector firms, with respect to importance of human resource management, educational structure of the workforce and internal R&D. Finally, cooperative R&D with research institutes and consulting firms are found to have significantly positive impact on the likelihood of coming up with incremental product, process and radical innovation, but the effect is relatively weak in case of horizontal R&D cooperation.
    Keywords: Absorptive capacity, strategic human resource, employment practices, compensation programs, R&D cooperation, innovation
    JEL: J21 J24 J33 L20 M12
    Date: 2015–11–19
  11. By: Lorenzo Cappellari (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Antonio Di Paolo
    Abstract: We exploit the 1983 language-in-education reform that introduced Catalan alongside Spanish as medium of instruction in Catalan schools to estimate the labour market value of bilingual education. Identification is achieved in a difference-in-differences framework exploiting variation in exposure to the reform across years of schooling and years of birth. We find positive wage returns to bilingual education and no effects on employment, hours of work or occupation. Results are robust to education-cohort specific trends or selection into schooling and are mainly stemming from exposure at compulsory education. We show that the effect worked through increased Catalan proficiency for Spanish speakers and that there were also positive effects for Catalan speakers from families with low education. These findings are consistent with human capital effects rather than with more efficient job search or reduced discrimination. Exploiting the heterogeneous effects of the reform as an instrument for proficiency we find sizeable earnings effects of skills in Catalan.
    Keywords: Bilingual education, returns to schooling, language-in-education reform, Catalonia.
    JEL: J24 J31 I28
    Date: 2015–11
  12. By: Marta De Philippis
    Abstract: This paper evaluates the behavioural responses of multitask agents to the provision of incentives skewed towards one task only. In particular it studies the case of strong research incentives for university professors and it analyzes their effects on the way university faculty members allocate effort between teaching and quantity and quality of research and on the way they select into different types of universities. I first obtain different individual level measures of teaching and research performance. Then, I estimate a difference in difference model, exploiting a natural experiment that took place at Bocconi University, which heavily strengthened incentives towards research in 2005. I find evidence that teaching and research efforts are substitutable in the professors' cost function: the impact of research incentives is positive on research activity and negative on teaching performance. The effects are driven by career concerns rather than by the monetary incentives and are stronger for low ability researchers. Moreover, under the new incentive regime lower ability researchers tend to leave the university. Since I estimate that teaching and research ability are positively correlated, this implies that also bad teachers tend to leave the university. These results are consistent with a model of incentives where agents allocate effort between two substitute tasks and ability is multidimensional.
    Keywords: Multitasking, incentives, teaching
    JEL: I2 J41 M5
    Date: 2015–11
  13. By: Picchio, Matteo (Tilburg University, Center For Economic Research); van Ours, Jan (Tilburg University, Center For Economic Research)
    Abstract: Using employees’ longitudinal data, we study the effect of working hours on the<br/>propensity of firms to sponsor training of their employees. We show that, whereas male part-time workers are less likely to receive training than male full-timers, parttime working women are as likely to receive training as full-time working women. Although we cannot rule out gender-working time specific monopsony power, we speculate that the gender-specific effect of working hours on training has to do with gender-specific stereotyping. In the Netherlands, for women it is common to work part-time. More than half of the prime age female employees work part-time. Therefore, because of social norms, men working part-time could send a different signal to their employer than women working part-time. This might generate a different propensity of firms to sponsor training of male part-timers than female part-timers.
    Keywords: part-time employment; working hours; firm-sponsored training; gender; human capital
    JEL: C33 C35 J24 M51 M53
    Date: 2015
  14. By: Leonie (Department of Economics and Business Economics, Aarhus University, Denmark); Christina Gravert (Department of Economics, University of Gothenburg, Sweden)
    Abstract: Perseverance to accomplish long-term goals, also know as grit, is a crucial determinant for success in life. In the present study we introduce an innovative laboratory design to elicit grit in an incentivized and controlled way. Subjects work on a computerized task to solve anagrams. By observing their decision not to shirk, we measure their grittiness experimentally. We find that the original questionnaire measure of grit developed by Duckworth et al. (2007) is significantly correlated with our new experimental measure - even when controlling for ability and a questionnaire measure of self-control. Moreover, subjects' earnings increase in their experimentally elicited grit
    Keywords: Grit, perseverance, laboratory experiment, real-effort task
    JEL: C91 D03 M50
    Date: 2015–07–10
  15. By: Jordi Brandts; David J. Cooper
    Abstract: We introduce a new game to the experimental literature and use it to study how behavioral phenomena affect the tradeoffs between centralized and decentralized management. Our game models an organization with two divisions and one central manager. Each division must choose or be assigned a product. Ignoring asymmetric information, the underlying game is an asymmetric coordination game related to the Battle of the Sexes. In equilibrium, the divisions coordinate on identical products. Each division prefers an equilibrium where the selected products are closest to its local tastes while central management prefers the efficient equilibrium, determined by a randomly state of the world, which maximizes total payoffs. The state of the world is known to the divisions, but the central manager only learns about it through messages from the divisions who have incentives to lie. Contrary to the theory, overall performance is higher under centralization, where the central manager assigns products to divisions after receiving messages from the divisions, than under decentralization where the divisions choose their own products. Underlying this, mis-coordination is common under decentralization and divisions fail to use their information when they do coordinate. Mis-coordination is non-existent under centralization and there is a high degree of truth-telling by divisions as well. Performance under centralization is depressed by persistent sub-optimal use of information by central managers.
    Keywords: Coordination, experiments, Organizations, Asymmetric Information
    JEL: C92 D23 J31 L23 M52
    Date: 2015–11
  16. By: Ipsita Roy (Graduate College "The Economics of Innovative Change", Friedrich Schiller University Jena, and Max Planck Institute of Economics.); Davide Consoli
    Abstract: Building on the canonical model of skill-biased technical change to incorporate differential effects of technology and international trade on the skill composition of occupations, the paper employs a task-based approach to analyze structural changes in regional employment within a rich vocational education setting in West Germany during 1979 and 2012. Results confirm theoretical predictions that regional employment districts with high initial share of routine occupations have experienced greater subsequent adoption of computer and information technology and larger decline in routine occupations. Exposure to global imports in goods and services have reduced overall employment in routine-intensive occupations; the magnitude being notably smaller as compared to technology. However, when looking at the direction of displacement of routine-workers, regions with greater share of routine jobs have experienced greater growth of high-skilled abstract jobs in the subsequent periods while the overlap between initial apprenticeship intensity and subsequent decline in regional routine employment is significantly strong. Taken together, findings show that unlike in the U.S. where employment growth in low-skilled service occupations has been the greatest, in Germany there is a greater trend towards occupational upgrading and larger growth in managerial and professional occupations due to the operationalization of its apprenticeship system.
    Keywords: Skill-biased Technical Change, Task-based Approach, Skill Composition, Technology, International Trade, Apprenticeship, Regional Employment District
    JEL: E24 F16 J21 J24 O33 R23
    Date: 2015–11–19

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