nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2018‒12‒17
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Paying for what kind of performance? Performance pay and multitasking in mission-oriented jobs By Daniel Jones; Mirco Tonin; Michael Vlassopoulos
  2. Sorting on Unobserved Skills into New Firms By Knutsson, Polina
  3. Gender Differences in Sabotage: The Role of Uncertainty and Beliefs By Simon Dato; Petra Nieken
  4. Occupational Match Quality and Gender over Two Cohorts By John T. Addison; Liwen Chen; Orgul D. Ozturk
  5. Do Male Workers Prefer Male Leaders? An Analysis of Principals' Effects on Teacher Retention By Aliza N. Husain; David A. Matsa; Amalia R. Miller
  6. The Effect of Monetary Incentives on Cognitive Effort, Emotions and Test-Solving Performance By Juan F. Castro; Gustavo Yamada; Hans Contreras; Freddy Linares; Herwig Watson
  7. Self-Confidence and Reactions to Subjective Performance Evaluations By Charles Bellemare; Alexander Sebald
  8. Wages and the Value of Nonemployment By Simon Jäger; Benjamin Schoefer; Samuel Young; Josef Zweimüller

  1. By: Daniel Jones; Mirco Tonin; Michael Vlassopoulos
    Abstract: How does pay-for-performance (P4P) impact productivity, multitasking, and the composition of workers in mission-oriented jobs? These are central issues in sectors like education or healthcare. We conduct a laboratory experiment, manipulating compensation and mission, to answer these questions. We find that P4P has positive effects on productivity on the incentivized dimension of effort and negative effects on the non-incentivized dimension for workers in non-mission-oriented treatments. In mission-oriented treatments, P4P generates minimal change on either dimension. Participants in the non-mission sector – but not in the mission-oriented treatments – sort on ability, with lower ability workers opting out of the P4P scheme.
    Date: 2018–07
  2. By: Knutsson, Polina (Department of Economics, Lund University)
    Abstract: Human capital features prominently in theoretical work on post-entry performance of new firms. Empirical analysis has, however, to a large extent overlooked the unobserved component of human capital focusing on years of education or labor market experience. This paper adds to the literature on worker characteristics and post-entry firm performance by putting the unobserved quality of workers in the center of analysis. I find strong evidence that new firms on average employ workers of lower unobserved quality relative to incumbent firms. Among new firms workers of higher unobserved quality are overrepresented in spin-offs and incorporated new firms. I further show that unobserved quality of workers is important for the post-entry performance of firms as it is a strong predictor of new firm survival.
    Keywords: Human capital; occupational choice; sorting; new firms
    JEL: J24 J60 M13
    Date: 2018–11–29
  3. By: Simon Dato; Petra Nieken
    Abstract: We study gender differences in relation to performance and sabotage in competitions. While we find no systematic gender differences in performance in the real effort task, we observe a strong gender gap in sabotage choices in our experiment. This gap is rooted in the uncertainty about the opponent's sabotage: in the absence of information about the opponent's sabotage choice, males expect to suffer from sabotage to a higher degree than females and choose higher sabotage levels themselves. If beliefs are exogenously aligned by implementing sabotage via strategy method, the gender gap in sabotage choices disappears. Moreover, providing a noisy signal about the sabotage level from which subjects might suffer leads to an endogenous alignment of beliefs and eliminates the gender gap in sabotage.
    Keywords: gender, sabotage, tournament, belief formation
    JEL: J16 M12 C91
    Date: 2018
  4. By: John T. Addison; Liwen Chen; Orgul D. Ozturk
    Abstract: Using a multi-dimensional measure of occupational mismatch, we report distinct gender differences in match quality and changes in match quality over the course of careers. A substantial portion of the gender wage gap stems from match quality differences among more educated individuals. College-educated females are significantly more mismatched than males. Individuals with children and in more flexible occupations also tend to be more mismatched. Again, this is especially true of women. Cohort effects are also discernible: college-educated males of the younger cohort have lower match quality than the older cohort, even as the new generation of women is doing better.
    Keywords: multidimensional skills, occupational mismatch, match quality, wages, gender wage gap, fertility, fertility timing
    JEL: J13 J16 J22 J23 J24 J31 J33 J38
    Date: 2018
  5. By: Aliza N. Husain; David A. Matsa; Amalia R. Miller
    Abstract: Using a 40-year panel of all public school teachers and principals in New York State, we explore how female principals affect rates of teacher turnover—an important determinant of school quality. We find that male teachers are about 12% more likely to leave their schools when they work under female principals than under male principals. In contrast, we find no such effects for female teachers. Furthermore, when male teachers request transfers, they are more likely to be to schools with male principals. These results suggest that opposition from male subordinates could inhibit female progress in leadership.
    JEL: J16 J45 J71 K31 M51
    Date: 2018–11
  6. By: Juan F. Castro (Universidad del Pacífico); Gustavo Yamada (Universidad del Pacífico); Hans Contreras (Universidad Nacional Mayor de San Marcos); Freddy Linares (Neurometrics); Herwig Watson (Neurometrics)
    Abstract: The relation between monetary incentives, cognitive effort and task performance has been extensively studied. There is, however, scant experimental evidence about the concurrent effect of incentives on cognitive effort and emotions, and its implications for task performance. It is well documented that high-stakes tests correlate with students’ anxiety and performance, but the available evidence is not causal. In this paper we estimate the effect of providing a monetary prize on the cognitive effort, emotions and efficacy exhibited by a group of university students when solving a set of four mathematics and logical reasoning questions. The prize was conditional on answering all questions correctly and was randomly assigned within a group of 126 participants. We find that the incentive produced more cognitive effort but this did not translate into increased test-solving efficacy. We provide evidence suggesting that the absence of increased efficacy despite the greater input of cognitive effort can be linked to the participants’ emotional response to the prize.
    Keywords: Cognitive effort, emotions, monetary incentives, eye-tracking, facial expressions
    JEL: D91 C91
    Date: 2018–12
  7. By: Charles Bellemare; Alexander Sebald
    Abstract: Subjective performance evaluations are commonly used to provide feedback and incentives to workers. However, such evaluations can generate significant disagreements and conflicts, the severity of which may be driven by many factors. In this paper we show that a workers’ level of self-confidence plays a central role in shaping reactions to subjective evaluations - overconfident agents engage in costly punishment when they receive evaluations below their own, but provide limited rewards to principals when evaluations exceed their own. In contrast, underconfident agents do not significantly react to evaluations below their own, but reward significantly evaluations exceeding their own. Our analysis exploits data from a principal-agent experiment run with a large sample of the Danish working age population, varying the financial consequences associated with the evaluations workers receive. In contrast to existing economic models of reciprocal behavior, reactions to evaluations are weakly related to the financial consequences of the evaluations. These results point towards a behavioral model of reciprocity that intertwines the desire to protect self-perceptions with over-/underconfidence.
    Keywords: subjective performance evaluations, self-confidence, reciprocity
    JEL: D01 D02 D82 D86 J41
    Date: 2018
  8. By: Simon Jäger; Benjamin Schoefer; Samuel Young; Josef Zweimüller
    Abstract: Nonemployment is often posited as a worker’s outside option in wage setting models such as bargaining and wage posting. The value of this state is therefore a fundamental determinant of wages and, in turn, labor supply and job creation. We measure the effect of changes in the value of nonemployment on wages in existing jobs and among job switchers. Our quasi-experimental variation in nonemployment values arises from four large reforms of unemployment insurance (UI) benefit levels in Austria. We document that wages are insensitive to UI benefit levels: point estimates imply a wage response of less than $0.01 per $1.00 UI benefit increase, and we can reject sensitivities larger than 0.03. In contrast, a calibrated Nash bargaining model predicts a sensitivity of 0.39 – more than ten times larger. The empirical insensitivity holds even among workers with a priori low bargaining power, with low labor force attachment, with high predicted unemployment duration, among job switchers and recently unemployed workers, in areas of high unemployment, in firms with flexible pay policies, and when considering firm-level bargaining. The insensitivity of wages to the nonemployment value we document presents a puzzle to widely used wage setting protocols, and implies that nonemployment may not constitute workers’ relevant threat point. Our evidence supports wage-setting mechanisms that insulate wages from the value of nonemployment.
    JEL: J31 J60 J65
    Date: 2018

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