nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2019‒11‒25
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Working Time Accounts and Turnover By Andrey Launov
  2. How Sticky Wages In Existing Jobs Can Affect Hiring By Mark Bils; Yongsung Chang; Sun-Bin Kim
  3. Do Teaching Practices Matter for Cooperation? By Syngjoo Choi; Booyuel Kim; Minseon Park; Yoonsoo Park
  4. Rulebooks in Relational Contracts By Li, Jin; Mukherjee, Arijit; Vasconcelos, Luis
  5. Managing performance evaluation systems: Relational incentives in the presence of learning-by-shirking By Li, Jin; Mukherjee, Arijit; Vasconcelos, Luis
  6. Working until you drop: Image concerns or prosocial motives? By Erkut, Hande; Shalvi, Shaul
  7. Aspirations, expectations, identities: behavioral constraints of micro-entrepreneurs By Catia Batista; Julia Seither
  8. Training, Human Capital, and Gender Gaps in Entrepreneurial Performance By Brixiová, Zuzana; Kangoye, Thierry

  1. By: Andrey Launov
    Abstract: Working time account is an organization tool that allows firms to smooth their demand for hours employed. Descriptive literature suggests that working time accounts are likely to reduce layoffs and inhibit increases in unemployment during recessions. In a model of optimal labour demand I show that working time account does not necessarily guarantee less layoffs at the firm level. These may be reduced or increased depending on whether the firm meets economic downturn with surplus or deficit of hours and on how productive the firm is. In expected terms, however, working time account reduces net job destruction at almost any level of firm’s productivity. Model predictions are consistent with dynamics of aggregate turnover in Germany during the Great Recession.
    Keywords: labour demand, working hours, working time account, turnover, layoff, Great Recession, Germany
    JEL: J23 J63
    Date: 2019
  2. By: Mark Bils; Yongsung Chang; Sun-Bin Kim
    Abstract: We consider a matching model of employment with flexible wages for new hires, but sticky wages within matches. Unlike most models of sticky wages, we allow effort to respond if wages are too high or too low. In the Mortensen-Pissarides model, employment is not affected by wage stickiness in existing matches. But it is in our model. If wages of matched workers are stuck too high, firms require more effort, lowering the value of additional labor and reducing hiring. We find that effort¡¯s response can greatly increase wage inertia.
    Keywords: E?ort; Employment; Sticky Wages; Wage Inertia
    JEL: E32 E24 J22
    Date: 2019–02
  3. By: Syngjoo Choi; Booyuel Kim; Minseon Park; Yoonsoo Park
    Abstract: This paper investigates the impact of a student-centered teaching pedagogy program on cooperative behaviors of 610 students in five middle schools. We combine the school- level program of changing teaching practice with laboratory experiments, implemented before and after the program, measuring changes of students¡¯ cooperation. We show that the program increased students¡¯ voluntary contributions in a linear public goods experiment and raised teamwork performance in a real-effort task where members pursue a common interest. Our findings support the idea that teaching practices stimulating interpersonal interaction among students affect the formation of cooperative norms among students.
    Keywords: teaching practices; project-based learning; cooperation; field experiment; laboratory experiments
    JEL: C91 C92 C93 I21
    Date: 2018–08
  4. By: Li, Jin (Business and Economics, The University of Hong Kong, K.K.); Mukherjee, Arijit (Michigan State University, Department of Economics); Vasconcelos, Luis (Department of Economics, University of Essex)
    Abstract: Firms can accrue large benefits by fostering worker initiative, but standardized work rules are still widely used. We present a model of relational incentives where the use of rules fluctuates over time as the firm faces shocks to its credibility. Worker initiative in adapting to local information can ensure production efficiency but also requires strong incentives. As shocks weaken relational incentives, the firm may adopt rules that yield satisfactory (though suboptimal) performance. Rules help the relationship survive the shocks, but the relationship becomes less efficient in the future. While the relationship may recover, its ability to weather future shocks deteriorates.
    Keywords: Relational contracts; standardization; rules; employee initiative
    JEL: D82 L23 M12
    Date: 2019–08–26
  5. By: Li, Jin (Department of Management, London School of Economics); Mukherjee, Arijit (Michigan State University, Department of Economics); Vasconcelos, Luis (Department of Economics, University of Essex)
    Abstract: An agent may privately learn which aspects of his responsibilities are more important by shirking on some of them and use that information in the future to shirk more effectively. In a model of long-term employment relationship, we characterize the optimal relational contract in the presence of such learning-by-shirking, and highlight how the performance measurement system can be managed to sharpen incentives. Two related policies are studied: intermittent replacement of existing measures, and adoption of new ones. In spite of the learning-by-shirking effect, the optimal contract is stationary and may involve stochastic replacement/adoption policies in order to dilute the agent's information rents from shirking.
    Keywords: Relational contracts; performance metrics; gaming; learning-by-shirking
    JEL: D82 L23 M52
    Date: 2019–08–26
  6. By: Erkut, Hande; Shalvi, Shaul
    Abstract: Working hard is costly, so people should work wisely. Yet, they do not always work efficiently, spending their effort on tasks that do not bring tangible benefits. One reason that potentially amplifies inefficient working is that people work in social environments where they are observed and where others' earnings also depend on their effort. In this paper, we investigate whether people work and earn more than they need, and if so why? We use laboratory experiments to disentangle two concerns that potentially lead people to work inefficiently hard, namely image concerns and prosocial motives. Our results suggest that people indeed overwork unnecessarily, and that this is mainly due to image concerns.
    Keywords: overworking,image concerns,social preferences
    JEL: C91 D91 J22
    Date: 2019
  7. By: Catia Batista; Julia Seither
    Abstract: This paper presents empirical evidence on the relationship between behavioral constraints and entrepreneurial success of micro-firms. Approximately 600 micro-entrepreneurs were randomized into treatments providing information about a role model, additionally the importance of establishing realistic goals, and how to maintain funds within their enterprises. Six months after implementation we find significant positive effects of shifts in aspirations on effort levels and savings. These effects can be precisely estimated even one year after implementation. On average, changes in investment behavior translate to increases in sales of 99% and 89% in profits compared to a control group. In contrast, human capital improvements have no effect on investment behavior. Furthermore, setting business goals mitigates the positive effects of role models on economic growth. Despite similar effects on effort levels, participants that condition their aspirations increase on a one-year goal save less and the positive effects on firm outcomes disappear over time.
    Date: 2019
  8. By: Brixiová, Zuzana; Kangoye, Thierry
    Abstract: In the aftermath of the global financial crisis, policymakers have been increasingly striving to support female entrepreneurship as a possible growth driver. This paper contributes to reconciling mixed findings in the literature on the effectiveness of entrepreneurial training with an analysis that links training and human capital, including tertiary education and non-cognitive skills, with gender gaps in entrepreneurial performance in Africa. We have found that while financial literacy training directly benefits men, it does not raise the sales level of women entrepreneurs. Instead, tertiary education has a direct positive link with the performance of women. Consistent with our theoretical model where different skills are complements, tertiary education can act as a channel that makes training effective. Regarding non-cognitive skills, evidence shows that women entrepreneurs who are tenacious achieve stronger sales performance. Our results underscore the importance of incorporating tertiary education and entrepreneurial training programs focused on a balanced set of skills, including non-cognitive skills, among policies for women entrepreneurs.
    Keywords: Female entrepreneurship,training,non-cognitive skills,tertiary education
    JEL: L53 O12 J4
    Date: 2019

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