nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2016‒03‒06
fifteen papers chosen by
Patrick Kampkötter
Universität zu Köln

  1. Underpaid and Corrupt Executives in China's State Sector By Feng, Xunan; Johansson, Anders C.
  2. What If Your Boss Is a Woman? Work Organization, Work-Life Balance and Gender Discrimination at the Workplace By Lucifora, Claudio; Vigani, Daria
  3. Multitask agents and incentives: the case of teaching and research for university professors By Marta De Philippis
  4. How wages are set: evidence from a large survey of firms By Jed Armstrong; Miles Parker
  5. What Workers want: Job Satisfaction in the U.S. By Humpert, Stephan
  6. Leadership experiences, labor market entry, and early career trajectories By Lundin, Martin; Nordström Skans, Oskar; Zetterberg, Pär
  7. Ageing and the Skill Portfolio: Evidence from Job Based Skill Measures By Audra J. Bowlus; Hiroaki Mori; Chris Robinson
  8. Call Me Educated: Evidence from a Mobile Monitoring Experiment in Niger - Working Paper 406 By Jenny C. Aker and Christopher Ksoll
  9. Does informal risk sharing induce lower efforts? Evidence from lab-in-the-field experiments in rural Mexico By Alger, Ingela; Juarez, Laura; Juarez-Torres, Miriam; Miquel-Florensa, Josepa
  10. Contract Competition between Hierarchies, Managerial Compensation and Imperfectly Correlated Shocks By Michela, Cella; Federico, Etro
  11. Human Resource Management Issues at a Rising Entrepreneurial Company in Cameroon: Employees' Perspective By DeLancey, Rebecca Mbuh
  12. Making Disability Work? The Effect of Financial Incentives on Partially Disabled Workers By Pierre Koning; Jan-Maarten van Sonsbeek
  14. Is Gender Diversity Profitable? Evidence from a Global Survey By Marcus Noland; Marcus Tyler Moran; Barbara Kotschwar
  15. Earnings Management Strategies during Financial Distress By Nagar, Neerav; Sen, Kaustav

  1. By: Feng, Xunan (Southwestern University of Finance and Economics); Johansson, Anders C. (Stockholm China Economic Research Institute)
    Abstract: This study examines the role of executive compensation in public governance. We collect data on corruption cases that involve top-level executives in Chinese listed state-controlled firms. We find a significant positive relationship between underpayment of executives and the likelihood of an investigation into corrupt behavior. We also show that corruption is positively associated with firm performance and that the relationship between underpayment of executives and corruption is influenced by firm performance, suggesting that top managers are more likely to engage in illicit behavior if they are compensated poorly while the firms under their control perform well. Finally, we find that pay-performance sensitivity decreases when top executives are involved in corruption investigations, indicating a lack of pecuniary incentives. Our empirical findings point towards an important relationship between executive compensation and corrupt behavior, thereby providing valuable input to the understanding of executive pay and its effects in China’s state sector.
    Keywords: Compensation; Executives; Incentives; Corruption; State sector; China
    JEL: D73 G38 J30 M52 P30
    Date: 2015–07–01
  2. By: Lucifora, Claudio (Università Cattolica del Sacro Cuore); Vigani, Daria (Università Cattolica del Sacro Cuore)
    Abstract: In this paper, we investigate the association between female leadership, work organization practices and perceived gender discrimination within firms. Using data for 30 European countries for the period 1995-2010, we find that having a female "boss" is associated with lower overall gender discrimination at work. The female boss effect, however, differs across gender: it is associated with lower discrimination among female employees, but higher among male employees. We also investigate the underlying mechanisms that shape gender discrimination within firms. We find evidence of a "women helping women" pattern through spill-over effects which reduce discrimination among women, but increase discrimination among men, particularly in female-dominated jobs. A better balance between work and life, a supportive work environment and flexible working time, particularly for women in high-skilled jobs, are shown to be effective in reducing gender discrimination. The above findings are robust to a number of specification changes and different sub-populations in our sample. Further, similar results are found when more traditional measures of gender imbalance, such as wages or career prospects, are used. Finally, to account for potential endogeneity and selection, arising from the non-random distribution of females in higher-rank jobs, we jointly estimate the selection process and the discrimination equation, finding support for a causal interpretation of the results.
    Keywords: gender discrimination, female leadership, work organization
    JEL: J16 J70 J81
    Date: 2016–02
  3. 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
  4. By: Jed Armstrong; Miles Parker (Reserve Bank of New Zealand)
    Abstract: This paper studies the micro-foundations of wage dynamics in New Zealand, using a large behavioural survey. The majority of firms adjust wages annually, with smaller firms more likely to set wages less frequently. Firms have limited synchronicity in wage setting, with over half of firms reporting that they do not have a fixed month for wage changes. There are some links from inflation and minimum wage legislation to wage adjustments; in both cases the link is stronger as firm size increases.
    Date: 2016–02
  5. By: Humpert, Stephan
    Abstract: By using the 2014 wave of the General Social Survey (GSS), this paper presents several determinants of job satisfaction. In a nutshell, U.S. workers prefer fair and respectful treatment by their employees, but not stress factors, such as working over-time or absence of home office arrangements. In terms of an employer friendly human resource strategy, especially the softer, or psychological determinants are rather cost-less to implement, but effective. In this analysis gender differences are rather weak.
    Keywords: Job Satisfaction; Human Resource Management; General Social Survey (GSS);
    JEL: J21 M54 Z13
    Date: 2016
  6. By: Lundin, Martin (IFAU - Institute for Evaluation of Labour Market and Education Policy); Nordström Skans, Oskar (Uppsala universitet); Zetterberg, Pär (Uppsala universitet)
    Abstract: We study how leadership experiences before labor market entry affect subsequent labor market performance, using a regression discontinuity design to isolate the causal effects. The design is applied to elections of representatives at Swedish student union (SU) councils. Archive data on winning and losing candidates at three major Swedish universities are mapped to register data on their subsequent labor market careers. The results show that students who acquired a position in the SU councils are more likely to have a rapid transition into employment than candidates who just missed getting to get such a leadership role. The employment effects are not confined to workplaces, organizations, or industries where previous candidates are employed, suggesting that the benefits of having been a student representative are general in nature. Elected representatives are more likely to hold a well-paid job within three years, but not thereafter. Overall, our estimates suggest that leadership experiences before labor market entry boost individuals’ initial career trajectories, whereas mid-term outcomes appear unaffected.
    Keywords: leadership experiences; extracurricular activities; labor market entry; earnings; higher education; non-cognitive skills
    JEL: I23 J24
    Date: 2016–01–22
  7. By: Audra J. Bowlus (University of Western Ontario); Hiroaki Mori (University of Western Ontario); Chris Robinson (University of Western Ontario)
    Abstract: The evolution of human capital over the life-cycle, especially during the accumulation phase, has been extensively studied within an optimal human capital investment framework. Given the ageing of the workforce, there is increasing interest in the human capital of older workers. The most recent research on wage patterns has adopted a new multidimensional skills/tasks approach. We argue that this approach is also well suited to the investigation of the evolution of the human capital of older workers. There is clear evidence that the typical concave Ben-Porath shape for a wage based single dimension human capital measure masks different shapes for the individual components in a multidimensional skill portfolio. Not all components evolve in the same way over the life-cycle. Some components of the skill vector are particularly sensitive to ageing effects for older workers, but this sensitivity is under-estimated using occupation level rather than individual level skill observations. The evidence suggests that workers can and do adjust their skill portfolios in various ways as they approach retirement and that the decline in skills is not purely driven by selection.
    Keywords: Ageing; Skills; Human Capital
    Date: 2016
  8. By: Jenny C. Aker and Christopher Ksoll
    Abstract: In rural areas of developing countries, education programs are often implemented through community teachers. While teachers are a crucial part of the education production function, observing their effort remains a challenge for the public sector. This paper tests whether a simple monitoring system, implemented via the mobile phone, can improve student learning as part of an adult education program. Using a randomized control trial in 160 villages in Niger, we randomly assigned villages to a mobile phone monitoring component, whereby teachers, students and the village chief were called on a weekly basis. There was no incentive component to the program. The monitoring intervention dramatically affected student performance: During the first year of the program, reading and math test scores were .15-.30 s.d. higher in monitoring villages than in nonmonitoring villages, with relatively stronger effects in the region where monitoring was weakest and for teachers for whom the outside option was lowest. We provide more speculative evidence on the mechanisms behind these effects, namely, teacher and student effort and motivation.
    Keywords: adult education, mobile phones, Niger
    JEL: D1 I2 O1 O3
    Date: 2015–05
  9. By: Alger, Ingela; Juarez, Laura; Juarez-Torres, Miriam; Miquel-Florensa, Josepa
    Abstract: How does informal risk sharing affect incentives to avoid risk? While moral hazard is expected under formal insurance, theory suggests that the incentive effects of informal risk sharing are ambiguous: internalization of the external effects of transfers on others may reduce or enhance incentives to avoid risk. To study this issue, which is particularly relevant for developing economies, we designed a novel real-effort lab experiment and conducted it in 16 small villages in rural Mexico. We fi nd that subjects internalize the effects of transfers enough for the presence of transfers to signi cantly increase e¤ort compared to autarky situations.
    Keywords: informal insurance, effort, moral hazard, free-riding effect, empathy effect
    JEL: C93 D64 O12
    Date: 2016–02
  10. By: Michela, Cella; Federico, Etro
    Abstract: We analyze competition through incentive contracts for managers in duopoly. Privately informed managers exert surplus enhancing e¤ort that generates an externality on the rival. Asymmetric information on imperfectly correlated shocks creates a two-way distortion of efforts under strategic substitutability in effort and a double downward distortion under strategic complementarity in effort. In the first case, as with contracts for R&D activity or small contractual spillovers for quantity and price competition, increasing the correlation of types reduces the polarization of contracts and the di¤erentials in managerial compensations between efficient and inefficient managers. In the second case, as with large contractual spillovers, the opposite occurs.
    Keywords: oligopoly, screening, two way distortion, incentives, investments
    JEL: D21 D82 D86 L13 L22
    Date: 2016–02–07
  11. By: DeLancey, Rebecca Mbuh
    Abstract: This case study examines the human resources practices in Universal-Cameroon Link, a promising small business in Cameroon. In-depth interviews were conducted with current and past employees to gain insight into their perspectives on management implementation of human resource management strategies and their (non-)effectiveness. Management treatment of employees not as significant contributors to the growth and success of the business, but mere as "tools" has resulted in distrust from both parties. Employees' dissatisfaction is exhibited through actions such as absenteeism and turnover while management practices of withholding earnings, nepotism, forfeiting overtime payments and bullying employees are indications of serious human resource management challenges for the business. Based on these discussions, targeted areas/questions are identified for management consideration to ensure the maximum utilization of the employees' contributions to the success of the business.
    Keywords: Equal pay; employee satisfaction; employee turnover/retention; employee contract; management conduct
    JEL: M10
    Date: 2015–06–01
  12. By: Pierre Koning (VU University Amsterdam, Leiden University, the Netherlands); Jan-Maarten van Sonsbeek (VU University Amsterdam, the Netherlands)
    Abstract: This study provides insight in the responsiveness of disabled workers to financial incentives, using administrative individual data from the Netherlands from 2006 to 2013. We focus on workers receiving partial DI benefits and with substantial residual work capacities that can be exploited. After the first phase of benefit entitlement, workers that do not use their residual income capacity experience a large drop in benefit income. In effect, this implies a substantial increase in incentives to resume work. With entitlement periods in the first phase of DI benefits varying across individuals, we use a difference-in-difference approach to analyze the effects on the incidence of work, the wage earnings and full work resumption of disabled workers. Based on the effect estimate on work incidence, we infer a labor elasticity rate of 0.12. Elasticity estimates are highest among younger DI recipients, as well as individuals with mental impairments. The incentive change has only a limited impact on wage earnings of partially disabled workers and no significant impact on work resumption rates.
    Keywords: Disability Insurance, Work Incentives
    JEL: C52 H53
    Date: 2016–01–11
  13. By: Francesco Devicienti (University of Torino and Collegio Carlo Alberto); Paolo Naticchioni (Roma Tre University and IZA); Andrea Ricci (ISFOL)
    Abstract: This paper investigates the effect of workplace unionization and product market volatility on firms' propensity to use temporary employment. Using Italian firm level data, we show that unionization and volatility have a positive impact on the share of temporary contracts. However, as volatility increases the union effect becomes negative, suggesting that in a highly volatile economic environment unions may be concerned about the weakening of their bargaining power associated with an extensive use of temporary workers. Furthermore, these effects are at work only for the use of non-training temporary contracts, while training temporary contracts are not affected by unions, volatility and their interplay. We argue that this occurs because non-training temporary contracts can be used by firms as a buffer stock to cope with uncertainty and by unions to protect insiders, while training temporary contracts are more likely to be used as a screening device for future permanent positions.
    Keywords: unions, temporary workers, training, product demand volatility, firms
    Date: 2015
  14. By: Marcus Noland (Peterson Institute for International Economics); Marcus Tyler Moran (Peterson Institute for International Economics); Barbara Kotschwar (Peterson Institute for International Economics)
    Abstract: Analysis of a global survey of 21,980 firms from 91 countries suggests that the presence of women in corporate leadership positions may improve firm performance. This correlation could reflect either the payoff to nondiscrimination or the fact that women increase a firm’s skill diversity. Women’s presence in corporate leadership is positively correlated with firm characteristics such as size as well as national characteristics such as girls’ math scores, the absence of discriminatory attitudes toward female executives, and the availability of paternal leave. The results find no impact of board gender quotas on firm performance, but they suggest that the payoffs of policies that facilitate women rising through the corporate ranks more broadly could be significant.
    Keywords: Women, gender, diversity, boards of directors, CEOs
    JEL: G3 J16 M14
    Date: 2016–02
  15. By: Nagar, Neerav; Sen, Kaustav
    Abstract: We examine whether financial distress and its severity have a role to play in managers’ decisions with respect to the choice of earnings management strategies. Our results suggests that firms in initial stages of distress engage in real earnings management through a reduction in the spending on selling, general and administrative expenses, and engage in classification shifting to increase profitability and liquidity. When distress becomes severe, firms cut-back on production, engage in income-increasing accruals management, and increase their spending on selling, general and administrative expenses. Initial under-spending on selling, general and administrative expenses is opportunistic with an intention to show improved performance. In extreme distress, increase on such spending is a sound economic decision. Our findings provide insights into how managers of distressed firms trade-off between liquidity, profitability and solvency in both short-run and long-run. JEL Codes: M41; G33.

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