nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2017‒12‒11
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Heterogeneous Effects of Performance Pay with Market Competition: Evidence from a Randomized Field Experiment By Friebel, Guido; Heinz, Matthias; Khashabi, Pooyan; Kretschmer, Tobias; Zubanov, Nick
  2. Fix the Game - Not the Dame: A Team Intervention to Restore Gender Equity in Leadership Evaluations By Jamie L. Gloor; Manuela C. Morf; Samantha Paustian-Underdahl; Uschi Backes-Gellner
  3. Human Capital and Development Accounting: New Evidence from Wage Gains at Migration By Schoellman, Todd; Hendricks, Lutz
  4. Job Tasks, Time Allocation, and Wages By Ralph Stinebrickner; Todd R. Stinebrickner; Paul J. Sullivan
  5. Exploring the Relationship Between Human Capital and Innovation at the Firm Level: A study on a Sample of European Firms By D'AMORE, Rosamaria; IORIO, Roberto; LUBRANO LAVADERA, Giuseppe
  6. Why test the theory of incentives in a dynamic framework? By Magali Chaudey
  7. Are school-provided skills useful at work? Results of the Wiles test By Liwiński, Jacek; Pastore, Francesco
  8. Hierarchical similarity biases in idea evaluation: A study in enterprise crowdfunding By Schweisfurth, Tim; Zaggl, Michael A.; Schöttl, Claus P.; Raasch, Christina

  1. By: Friebel, Guido; Heinz, Matthias; Khashabi, Pooyan; Kretschmer, Tobias; Zubanov, Nick
    Abstract: It is well established that the effectiveness of pay-for-performance (PfP) schemes depends on employee- and firm-specific factors. Much less is known about the role of factors outside the firm. We investigate the role of market competition on the effectiveness of PfP. Our theory posits that there are two counteracting effects, a business stealing and a competitor response effect, that jointly generate an inverted U-shape relationship between PfP effectiveness and competition. Weak competition creates low incentives to exert effort because there is little extra market to gain, while strong competition creates low incentives as competitors respond more. PfP hence has the strongest effect for moderate competition. We test this prediction with a field experiment on a retail chain which confirms our theory and refutes alternative explanations.
    Keywords: business stealing; competitor response; Management Practices; market competition; pay for performance (PfP)
    Date: 2017–11
  2. By: Jamie L. Gloor (Technical University of Munich); Manuela C. Morf (Erasmus University of Rotterdam); Samantha Paustian-Underdahl (Florida International University); Uschi Backes-Gellner (University of Zurich)
    Abstract: The leadership literature shows consistent, sizeable, and persistent effects indicating that female leaders face significant biases in the workplace compared with male leaders. However, the social identity leadership literature suggests these biases might be overcome at the team level by adjusting the number of women in the team. Building on this work, we conducted 2 multiple source, multiple wave, multi-level randomized field experiments to test if the gender composition of teams helps to restore equity in leadership evaluations of men and women. Across two samples of university students engaged in a team-building exercise, we find that male leaders are rated as more prototypical leaders than female leaders despite no differences in leaders' self-reported prototypicality; however, this male leadership advantage is eliminated in gender-balanced teams. In Study 2, we extend this finding by supporting a moderated mediation model showing that leader gender and the team's gender composition interact to relate to perceived trust in the leader, through the mediating mechanism of leader prototypicality. Findings support the social identity model of organizational leadership and indicate a boundary condition of role congruity theory, bolstering our need for a more social relational, context-based approach to leadership.
    Keywords: gender; leadership; teams; social identity; prototypicality
    Date: 2017–01
  3. By: Schoellman, Todd (Federal Reserve Bank of Minneapolis); Hendricks, Lutz (University of North Carolina)
    Abstract: We use new data on the pre- and post-migration wages of U.S. immigrants to measure the importance of human capital for development accounting. Wages increase at migration, but by less than half of the gap in GDP per worker. This finding implies that human capital accounts for a large share of cross-country income differences. Wage gains decline with education, consistent with imperfect substitution between skill types. We bound the human capital share in development accounting to between one-half and two-thirds; additional assumptions lead to an estimate of 60 percent. We also provide results on the importance of assimilation and skill transfer.
    Keywords: Human capital; Total factor productivity; Cross-country income differences; Immigration; Skill substitution
    JEL: J31 O11
    Date: 2017–08–10
  4. By: Ralph Stinebrickner; Todd R. Stinebrickner; Paul J. Sullivan
    Abstract: While a burgeoning literature has extolled the conceptual virtues of directly measuring the underlying job tasks that define work activities, in practice task-based approaches have been hampered by well-known data limitations. We study wage determination using data collected specifically to address these limitations. Most fundamentally, we construct the first longitudinal dataset containing job-level task information for individual workers. New quantitative task measures take advantage of unique survey questions that ask respondents to detail the amount of time spent performing People, Information, and Objects tasks at different skill levels. These measures have clear interpretations, suggest natural proxies for on-the-job human capital accumulation, and provide methodological guidance for future data collection initiatives. A model of comparative advantage highlights the benefits of the unique data features, and guides the specification and interpretation of empirical models. We provide new findings about the effect of current and past tasks on wages. First, current job tasks are quantitatively important, with high skilled tasks being paid substantially more than low skilled tasks. Second, there is no evidence of learning-by-doing (i.e., effects of past tasks) for low skilled tasks, but strong evidence for high skilled tasks. Current and past high skilled information tasks are particularly valuable, although high skilled interpersonal tasks also play a significant role. Shifting 10 percent of work time from low skilled people tasks to high skilled information tasks increases a worker’s yearly wage by 22 percent after ten years. The accumulation of valuable task-specific experience accounts for 70 percent of this increase, and the direct current-period effect of performing different tasks accounts for the remainder.
    JEL: J24
    Date: 2017–11
  5. By: D'AMORE, Rosamaria (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy); IORIO, Roberto (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy); LUBRANO LAVADERA, Giuseppe (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy)
    Abstract: In this paper, we explore the relationship between the human capital “embodied” in the workforce and the innovative capabilities of the firm, adopting an international comparative perspective. In fact data come from a survey (EFIGE) run in seven European countries during the 2007-2009 period. They are analysed with several models of multivariate analysis also with the support of a semi-parametric model. Our results show a positive relationship between the ratio of graduated employees and the percentage of turnover from innovative products, being the share of personnel employed in R&D constant. This relationship is not linear: we find decreasing marginal returns for human capital and R&D. We then find a complementarity between human capital and R&D: the strength of the link between human capital and innovation is higher when the firm’s R&D increases. We also find some significant differences in the intensity of the human capital/innovation link across different countries.
    Keywords: Human capital; R&D; Innovation;
    JEL: D22 J24 O32
    Date: 2017–04–29
  6. By: Magali Chaudey (Univ Lyon, UJM Saint-Etienne, GATE L-SE UMR 5824, F-42023 Saint- Etienne, France)
    Abstract: The recognition that contracts have a time dimension has given rise to an abundant literature since the end of the 1980s. In such a dynamic context, the contract may take place over several periods, and agents develop repeated interactions. Surprisingly, few papers have tried to apply the predictions of the dynamic theory incentives to data. However, taking a dynamic context into account can improve static empirical approaches by introducing new tools to distinguish between adverse selection and moral hazard, two asymmetrical contexts representative of the Principal–Agent model, or by solving the problem of endogeneity. A dynamic empirical approach also allows to renew the theoretical contract conception, and reveals some new features of contracts: memory, learning, and commitment.
    Keywords: Theory of incentives, Contract, Dynamics, Empirical Tests
    JEL: D86 D82 C13
    Date: 2017
  7. By: Liwiński, Jacek; Pastore, Francesco
    Abstract: We test for the signalling hypothesis versus human capital theory using the Wiles test (1974) in a country which has experienced a dramatic increase in the supply of skills. For this purpose, we construct a job match index based on the usefulness of the school-provided skills and the relevance of the job performed to the field of study. Then we regress the first earnings of graduates on this index using OLS and Heckit to control for omitted heterogeneity of the employed. The data we use come from a representative tracer survey of Poles who left secondary schools or graduated from HEIs over the period of 1998-2005. We find that only the HEI graduates obtain a wage premium from skills acquired in the course of formal education. This finding is robust to a large number of robustness checks with different indicators of the educational mismatch and instrumental variables.
    Keywords: education,skills,signalling,job matching,wages,Heckman correction
    JEL: J24 J31
    Date: 2017
  8. By: Schweisfurth, Tim; Zaggl, Michael A.; Schöttl, Claus P.; Raasch, Christina
    Abstract: To be successful innovators, organizations must select the best ideas for implementation. Extant research shows that idea selection is distorted by a number of biases, but has failed to consider hierarchy, a key element of organizations. We examine how hierarchical distance between an idea's creator and its evaluator affects evaluation outcomes and thus advance three competing theoretical predictions based on homophily, competition, and status. To test our predictions, we use a unique dataset from an enterprise crowdfunding initiative at Siemens where 265 employees evaluated 77 ideas by allocating corporate funds, resulting in 20,405 evaluation dyads. We find that idea evaluations are more favorable if the idea creator is hierarchically similar to the evaluator, thus supporting the homophily perspective. Idea novelty amplifies this bias, inducing more social evaluations. Our findings are robust to various specifications and tests, and are absent in a subsample where idea creators remained anonymous. We contribute to the idea evaluation research and inform organizational idea selection process designs.
    Keywords: idea evaluation,idea selection,crowdfunding,hierarchy,homophily,status,competition
    JEL: D91 M19 O31
    Date: 2017

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