nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2018‒02‒12
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Healthy business? Managerial education and management in healthcare By Bloom, Nicholas; Lemos, Renata; Sadun, Raffaella; Reenen, John Van
  2. All in the Family? CEO Choice and Firm Organization By Renata Lemos; Daniela Scur
  3. Work-Life Balance and Labor Force Attachment at Older Ages By Marco Angrisani; Maria Casanova; Erik Meijer
  4. The mightier, the stingier: Firms’ market power, capital intensity, and the labor share of income By Adrjan, Pawel
  5. Targeting the Key Player: An Incentive-Based Approach By Mohamed Belhaj; Frédéric Deroïan
  6. How long do early career decisions follow women? The impact of industry and firm size history on the gender and motherhood wage gaps By Holly Monti; Lori Reeder; Martha Stinson
  7. Incentives in the Public Sector: Evidence from a Government Agency By Simon M. Burgess; Carol Propper; Marisa Ratto; Emma Tominey
  8. Moral Hazard and Target Budgets By Shingo Ishiguro; Yosuke Yasuda

  1. By: Bloom, Nicholas; Lemos, Renata; Sadun, Raffaella; Reenen, John Van
    Abstract: We investigate the link between hospital performance and managerial education by collecting a large database of management practices and skills in hospitals across nine countries. We find that hospitals that are closer to universities offering both medical education and business education have higher management quality, more MBA trained managers and lower mortality rates. This is true compared to the distance to universities that offer only business or medical education (or neither). We argue that supplying joint MBA-healthcare courses may be a channel through which universities increase medical business skills and raise clinical performance
    Keywords: management; hospitals; mortality; education
    JEL: I1 M1
    Date: 2017–09–01
  2. By: Renata Lemos; Daniela Scur
    Abstract: Family firms are the most prevalent firm type in the world, particularly in emerging economies. Dynastic family firms tend to have lower productivity, though what explains their underperformance is still an open question. We collect new data on CEO successions for over 800 firms in Latin America and Europe to document their corporate governance choices and, crucially, provide causal evidence on the effect of dynastic CEO successions on the adoption of managerial best practices tied to improved productivity. Specifically, we establish two key results. First, there is a preference for male heirs: when the founding CEO steps down they are 30pp more likely to keep control within the family when they have a son. Second, instrumenting with the gender of the founder's children, we estimate dynastic CEO successions lead to 0.8 standard deviations lower adoption of managerial best practices, suggesting an implied productivity decrease of 5 to 10%. To guide our discussion on mechanisms, we build a model with two types of CEOs (family and professional) who decide whether to invest in better management practices. Family CEOs cannot credibly commit to firing employees without incurring reputation costs. This induces lower worker effort and reduces the returns to investing in better management. We find empirical evidence that, controlling for lower skill levels of managers, reputational costs constrain investment in better management.
    Keywords: CEO, family firms, organisation, emerging economies
    JEL: M11 L2
    Date: 2018–01
  3. By: Marco Angrisani (University of Southern California); Maria Casanova (California State University-Fullerton); Erik Meijer (University of Southern California)
    Abstract: We use data from the Health and Retirement Study to examine the role of work-life balance (WLB) as a nonmonetary determinant of retirement transitions, conditional on job attributes such as hours of work, compensation and benefits. We show that low levels of WLB are significantly associated with subsequent reductions in labor supply for workers aged 51 to 79, and document heterogeneity by gender and employment status. Moreover, WLB mediates labor supply responses to spousal health shocks. Workers who report higher levels of work-to-life interference are significantly more likely to reduce their labor supply in the next two periods following a spouse’s health shock, and this effect is once more heterogeneous. The moderating effect of WLB is stronger for women than men. Among female workers, it is stronger for those employed part-time at baseline.
    Date: 2017–09
  4. By: Adrjan, Pawel
    Abstract: What determines the proportion of a firm’s income that workers receive as compensation? This paper uses longitudinal firm data from a period of substantial labor share variation to understand the firm-level determinants of the labor share of income—a question that has so far only been addressed with country- and sector-level data. Firms with greater market power and a higher ratio of capital to labor allocate a smaller proportion of their value added to workers. These results suggest that firm-level drivers play a key role in the evolution of the aggregate labor share, which have declined significantly since the 1970s.
    Keywords: Labor Share, Employee Compensation, Factor Income Distribution, Market Power, Capital Intensity
    JEL: D33 E25 J24 J30
    Date: 2018–01–13
  5. By: Mohamed Belhaj (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE); Frédéric Deroïan (InSHS-CNRS and Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE)
    Abstract: We consider a network game with local complementarities. A policymaker, aiming at minimizing or maximizing aggregate effort, contracts with a single agent on the network to trade effort change against transfer. The policymaker has to find the best agent and the optimal contract to offer. Our study shows that for all utilities with linear best-responses, it only takes two statistics about the position of each agent on the network to identify the key player: the Bonacich centrality and a weighted measure of the number of closed walks originating from the agent. We also characterize key players under linear quadratic utilities for various contractual arrangements.
    Keywords: key player, Network, Linear Interaction, incentives, contract, limited budget
    JEL: C72 D85
    Date: 2018–02
  6. By: Holly Monti; Lori Reeder; Martha Stinson
    Abstract: We add to the gender wage gap literature by considering how characteristics of past employers are correlated with current wages and whether differences between the work histories of men and women are related to the persistent gender wage gap. Our hypothesis is that women have spent less time over the course of their careers in higher paying industries and have less job- and industry-specific human capital and that these characteristics are correlated with male-female earnings differences. Additionally, we expect that difference in the work histories between women with children and childless women might help explain the observed motherhood wage gap. We use unique administrative employer history data to conduct a standard decomposition exercise to determine the impact of differences in observable job history characteristics on the gender and motherhood wage gaps. We find that industry work history has two opposing effects on both these wage gaps. The distribution of work experience across industries contributes to increasing the wage gaps, but the share of experience spent in the industry sector of the current job works to decrease earnings differences.
    Date: 2018–01
  7. By: Simon M. Burgess (IZA - Institute for the study of labor - Institute for the Study of Labor - IZA); Carol Propper (Imperial College London - Space & Atmospheric Physics Group); Marisa Ratto (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Emma Tominey (IZA - Institute for the study of labor - Institute for the Study of Labor - IZA)
    Abstract: We study the impact of team-based performance pay in a major UK government agency, the public employment service. The scheme covered quantity and quality targets, measured with varying degrees of precision. We use unique data from the agency's performance management system and personnel records, linked to local labour market data. We show that on average the scheme had no significant effect but had a substantial positive effect in small teams, fitting an explanation combining free riding and peer monitoring. The impact was greater on better-measured quantity outcomes than quality outcomes. The scheme was very cost effective in small offices.
    Keywords: personnel economics,teams,Incentives,public sector,performance
    Date: 2017
  8. By: Shingo Ishiguro (Graduate School of Economics, Osaka University); Yosuke Yasuda (Graduate School of Economics, Osaka University)
    Abstract: In this paper we investigate a wide class of principal-agent problems with moral hazard and target budgets. The latter requires that the principal fixes a total budget for the wages paid to agents regardless of their outputs realized ex post. Target budgets are relevant not just because they are exogenous institutional constraints in some cases, but they can also endogenously arise in other cases, especially when agents f performances are not verifiable and thus the principal needs subjective evaluations. Although target budgets impose an additional constraint, we show the irrelevance theorem that the principal is never worse off using target budgets when there are at least two risk-neutral agents. Even when all agents are risk averse, we also show that the similar irrelevance result asymptotically holds if the number of agents is sufficiently large. Furthermore, we characterize optimal contracts when the target budget becomes a tight constraint so that the irrelevance result cannot be applied.
    Keywords: Moral Hazard, Multiple Agents, Subjective Evaluation, Target Budgets; Moral Hazard, Multiple Agents, Subjective Evaluation, Target Budgets
    JEL: D82 D86
    Date: 2018–02

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