nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2018‒08‒27
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Employee Involvement and Job Satisfaction: A Tale of the Millennial Generation By Gustavo A. García; Diego René Gonzales-Miranda; Oscar Gallo; Juan Pablo Roman-Calderón
  2. Working Hard or Working Smart? By Bracha, Anat; Fershtman, Chaim
  3. What Causes Labor Turnover To Vary? By Edward P. Lazear; Kristin McCue
  4. Where Does Profit Sharing Work Best? A Meta-Analysis on the Role of Unions, Culture, and Values By Doucouliagos, Chris; Laroche, Patrice; Kruse, Douglas L.; Stanley, T. D.
  5. Restoring Trust in Finance: From Principal-Agent to Principled Agent By Gordon Menzies; Thomas Simpson; Donald Hay; David Vines
  6. Job Referrals and Skills By Benjamin Lester; David Rivers; Giorgio Topa
  7. The Gender Earnings Gap in the Gig Economy: Evidence from over a Million Rideshare Drivers By Cody Cook; Rebecca Diamond; Jonathan Hall; John A. List; Paul Oyer
  8. The Rise of Human Capitalist By Andrea Eisfeldt; Antonio Falato; Mindy Z. Xiaolan
  9. How internal and external supervision impact the dynamics between boards and Top Management Teams and TMT reflexivity By Melanie de Waal; Floor Rink; Janka Stoker; Dennis Veltrop

  1. By: Gustavo A. García; Diego René Gonzales-Miranda; Oscar Gallo; Juan Pablo Roman-Calderón
    Abstract: The purpose of this paper is to empirically study the effect of employee involvement in the workplace on job satisfaction for millennial workers in Colombia. Data were obtained from a sample of 2103 millennial employees working in 11 companies of different sectors located in the five main cities of Colombia. Ordered probit models were estimated to study the effect of employee involvement on job satisfaction, in general, and how different forms of participative decision-making in the workplace produce different impacts on individual satisfaction with objective and intrinsic aspects of the job, in particular. The empirical results show that, for millennial workers, there is a positive link between employee involvement and job satisfaction. Moreover, there is a higher positive impact on job satisfaction when millennial workers participate in decisions on general aspects of the company than when they participate in specific decisions such as those concerning teamwork or main tasks at work. Another interesting result is that millennial workers attach high importance to intrinsic aspects of their jobs (such as the possibility to use their knowledge in the work), which may improve their satisfaction in a higher participative environment.
    Keywords: millennial workers, job satisfaction, employee involvement, Colombia
    JEL: J28 M12 M54 C25
    Date: 2018–08–15
  2. By: Bracha, Anat; Fershtman, Chaim
    Abstract: Almost all jobs require a combination of cognitive effort and labor effort. The focus of the paper is on the effect of different incentive schemes on the chosen combination of these types of efforts. We use an experimental approach to show that tournament incentives may induce agents to work harder but not necessarily smarter. This effect was stronger for women. We then ran a "managerial bonus" experiment in which a preassigned manager receives a bonus whenever the overall performance of his/her group is above a given threshold level. Although the bonus does not affect the participants' direct incentives, it induces participants to lower their cognitive effort and increase their labor effort.
    Keywords: Financial Economics, Labor and Human Capital
    Date: 2018–05
  3. By: Edward P. Lazear; Kristin McCue
    Abstract: Most turnover reflects churn, where hires replace departures. Churn varies substantially by employer, industry and worker characteristics. In the LEHD (QWI) data, permanent employer differences account for 36% of the variation in churn. For example, leisure and hospitality turnover is more than double that of manufacturing. The cost of churn is proxied by the mean wage and the benefit by the variance in wages. QWI and JOLTS data confirm predictions. High mean wage occupations and industries experience less churn and high wage-variance ones experience more churn. Additionally, less educated, younger and male workers have higher separation and churn rates.
    JEL: E24 J0 J6 J63 M50 M51
    Date: 2018–07
  4. By: Doucouliagos, Chris (Deakin University); Laroche, Patrice (University of Lorraine); Kruse, Douglas L. (Rutgers University); Stanley, T. D. (Deakin University)
    Abstract: In this article we re-examine the relationship between group-based profit sharing and productivity. Our meta-regression analysis of 313 estimates from 56 studies controls for publication selection and misspecification biases and investigates the impact of firm level unionisation and national differences in values and culture. Profit sharing is positively related to productivity on average, with a stronger relationship where there is higher unionisation and in countries where honesty is less highly valued and there are higher levels of individualism. The latter two results suggest profit sharing works best in settings where cooperation does not naturally occur. The positive effect of profit sharing on productivity is larger in cooperative firms and in transition economies.
    Keywords: profit sharing, productivity, meta-regression analysis, unions, tax evasion, individualism
    JEL: J33 J51 J54 M52
    Date: 2018–06
  5. By: Gordon Menzies (University of Technology Sydney); Thomas Simpson (Blavatnik School of Government, University of Oxford); Donald Hay (University of Oxford); David Vines (Department of Economics, Balliol College, St Antony’s College, and Institute for New Economic Thinking (INET) at the Oxford Martin School, University of Oxford; Crawford School of Public Policy, Australian National University; and Centre for Economic Policy Research)
    Abstract: Bonuses in finance represents a bad equilbrium among multiple equilibria. Motivating agents with bonuses can promote untruthfulness, via motivation crowding out, justifying the decision to pay them bonuses. In the equilibrium that works in other professions, moral norms are upheld enough to not require bonuses. Escaping the bad equilibrium is difficult if banks engage in an ‘optimal’ amount of deceit (moral optimization). Restoring trust instead requires that untruthfulness be ruled out a priori (moral prioritization). Reinstating truth telling in finance must contend with a tendency for ethics to be confined to the private domain and motivation crowding out in finance.
    Keywords: Bank Bonuses; Trust; Deregulation
    JEL: G21 G28 H12 E52
    Date: 2018–07–01
  6. By: Benjamin Lester (Federal Reserve Bank of Philadelphia); David Rivers (University of Western Ontario); Giorgio Topa (Federal Reserve Bank of New York)
    Abstract: We exploit a novel data set to study the extent to which firms rely on referrals when hiring for positions that require different levels of skill. The data come from the 2013-16 waves of a special supplement to the Survey of Consumer Expectations that focuses on job search behavior and outcomes. Using a measure of the skill content of different occupations that is widely used in the literature, we find that referrals are used most for low- and high-skill jobs, and less for intermediate-skill jobs. We develop a model that is consistent with these findings, in which referrals help firms to overcome two types of frictions: search frictions that make it difficult to find potential workers, and information frictions that make it difficult to identify the best worker from this set. According to our theory, the primary benefit of referrals for filling low-skill jobs is related to search frictions, while the primary benefit of referrals for filling high-skill jobs is related to information frictions. We explore the implications for inequality, and the differential effects of new technologies on hiring across skill levels.
    Date: 2018
  7. By: Cody Cook; Rebecca Diamond; Jonathan Hall; John A. List; Paul Oyer
    Abstract: The growth of the “gig” economy generates worker flexibility that, some have speculated, will favor women. We explore this by examining labor supply choices and earnings among more than a million rideshare drivers on Uber in the U.S. We document a roughly 7% gender earnings gap amongst drivers. We completely explain this gap and show that it can be entirely attributed to three factors: experience on the platform (learning-by-doing), preferences over where to work (driven largely by where drivers live and, to a lesser extent, safety), and preferences for driving speed. We do not find that men and women are differentially affected by a taste for specific hours, a return to within-week work intensity, or customer discrimination. Our results suggest that there is no reason to expect the “gig” economy to close gender differences. Even in the absence of discrimination and in flexible labor markets, women’s relatively high opportunity cost of non-paid-work time and gender-based differences in preferences and constraints can sustain a gender pay gap.
    JEL: J16 J31
    Date: 2018–06
  8. By: Andrea Eisfeldt (University of California, Los Angeles); Antonio Falato (Federal Reserve Board); Mindy Z. Xiaolan (University of Texas at Austin)
    Abstract: Human capitalists are firm employees whose income is equity-based – i.e., for example, based on equity share grants or stock-options, and as such share into the firm’s capital gains much like non-employee capitalists. In this paper, we use theory and data to quantify their macroeconomic importance. Using two measures of non-wage income as a share of output -- hand-collected information on the number of shares reserved for employee stock option compensation (RS) or based on either selling, general, and administrative expenses (SGA) -- we show that since the 1960s human capitalists have become an increasingly important class of income earners in the US. A parsimonious model of ``technological complementary" between physical capital and human capitalists can replicate this fact as a response to investment-specific technological change. Cross-industry evidence further corroborates the key prediction of the model that there should be a negative relation between the human capitalists’ share and investment good prices. We plan to use the model to get quantitative estimates of the degree of complementarity between physical and human capital. The estimated version of the structural model will also allow us to explore the quantitative implications of the complementarity mechanism.
    Date: 2018
  9. By: Melanie de Waal; Floor Rink; Janka Stoker; Dennis Veltrop
    Abstract: Reflexivity can prevent Top Management Teams (TMTs) from using decision biases that harm sound strategic decision making of TMTs. To ensure reflexivity, TMTs are supervised internally by supervisory boards, and externally by independent supervisory authorities, but there is theoretical debate on their respective impact. We propose that frequent internal supervision is associated with Board-TMT relationship conflict, but this relationship will be less strong when TMTs are supervised by boards with an open board composition (including newer members). When such conflict occurs it can harm TMT reflexivity, but we expect that this relationship will be less strong when external supervision increases. These hypotheses were supported in a multisource team-level data set collected in the field among TMTs (N = 111 TMT members) and their supervisory boards (N = 152 board members) of 56 insurance companies. This study advances empirical and practical knowledge on the distinct and interdependent impact of internal and external supervision on TMT reflexivity.
    Keywords: internal supervision; external supervision; relationship conflict; boardroom dynamics; reflexivity; board composition
    JEL: D74 G22 G38
    Date: 2018–08

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