nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2020‒03‒16
ten papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Affirmative Action and Human Capital Investment: Evidence from a Randomized Field Experiment By Christopher Cotton; Brent R. Hickman; Joseph P. Price
  2. Willing to pay for security: a discrete choice experiment to analyse labour supply preferences By Datta, Nikhil
  3. Firm-specific training By Felli, Leonardo; Harris, Christopher
  4. Vaccines at Work By Hoffmann, Manuel; Mosquera, Roberto; Chadi, Adrian
  5. Are patient-regarding preferences stable? By Wang, Jian; Iversen , Tor; Hennig-Schmidt , Heike; Godager , Geir
  6. Raising the Bar: Causal Evidence on Gender Differences in Risk-Taking from a Natural Experiment By Böheim, René; Lackner, Mario; Wagner, Wilhelm
  7. Building a productive workforce: the role of structured management practices By Cornwell, Christopher; Schmutte, Ian M.; Scur, Daniela
  8. Incentive Pay and Firm Productivity: Evidence from China By Jin, Zhangfeng; Pan, Shiyuan
  9. The value of a peer By Ingo E. Isphording; Ulf Zölitz
  10. Performance Feedback and Peer Effects By Villeval, Marie Claire

  1. By: Christopher Cotton (Queen's University); Brent R. Hickman (Olin Business School, University of Washington); Joseph P. Price (Brigham Young University)
    Abstract: We conduct a field experiment paying students based on relative performance on a mathematics exam and tracking study efforts on a mathematics website to test the incentive effects of Affirmative Action (AA) policies on study effort and math proficiency. AA increases study effort and exam performance for the majority of disadvantaged students targeted by the policy. While the performance of the highest-ability students targeted by the AA policy declines, on average study activity and exam performance rise under AA. Overall, the experimental evidence suggests that AA can promote greater equality of market outcomes while narrowing achievement gaps.
    Keywords: affirmative action, large contest, field experiment, all-pay auction, college admissions, human capital, study effort
    JEL: J15 J24 C93 D82 D44
    Date: 2020–03
  2. By: Datta, Nikhil
    Abstract: This paper investigates the extent to which labour supply preferences are responsible for the marked rise in atypical work arrangements in the UK and US. By employing vignettes in a discrete job choice experiment in a representative survey, I estimate the distribution for preferences and willingness-to-pay over various job attributes. The list of attributes includes key distinguishing factors of typical and atypical work arrangements, such as security, work-related benefits, flexibility, autonomy and taxation implications. The results are indicative that the majority of the population prefer characteristics associated with traditional employee-employer relationships, and this preference holds even when analysing just the sub-sample of those in atypical work arrangements. Additionally, preferences across the UK and US are very similar, despite differences in labour market regulations. Rather than suggesting that labour supply preferences have contributed to the increase in atypical work arrangements, I find that the changing nature of work is likely to have significant negative welfare implications for many workers.
    Keywords: atypical work; self-employment; willingness-to-pay; experiment; labour supply preferences
    JEL: J22 J24 J32 J81
    Date: 2019–07
  3. By: Felli, Leonardo; Harris, Christopher
    Abstract: This paper investigates the market provision of firm-specific training, and identifies the inefficiencies associated with it. Within a general stochastic learning-by-doing model, there is a potential inefficiency in the market provision of firm-specific training. In order to determine whether this inefficiency is in fact present, we analyze two special cases of the model: the accelerated productivity-enhancement model and the accelerated learning model. In both models, the inefficiency is indeed present. However, the nature of the inefficiency depends on the balance between the two key components of training, namely productivity enhancement and employee evaluation. In the accelerated productivity-enhancement model, training results in an increase in productivity enhancement but no change in employee evaluation, and training is overprovided by the market. In the accelerated learning model, training results in a proportionate increase in both productivity enhancement and employee evaluation, and training is underprovided by the market. In both cases, turnover is inefficiently low.
    Keywords: specific human capital; training; learning-by-doing; turnover; productivity enhancement; employee evaluation
    JEL: D61 D86 J20 J24
    Date: 2018–05–01
  4. By: Hoffmann, Manuel (Texas A&M University); Mosquera, Roberto (Universidad de las Américas); Chadi, Adrian (University of Konstanz)
    Abstract: Influenza vaccination could be a cost-effective way to reduce costs in terms of human lives and productivity losses, but low take-up rates and vaccination unintentionally causing moral hazard may decrease its benefits. We ran a natural field experiment in cooperation with a bank in Ecuador, where we modified its vaccination campaign. Experimentally manipulating incentives to participate in this health intervention allows us to study peer effects with organizational data and to determine the personal consequences of being randomly encouraged to get vaccinated. We find that assigning employees to get vaccinated during the workweek roughly doubled take-up compared to employees assigned to the weekend, which indicates that reducing opportunity costs plays an important role in increasing vaccination rates. Coworker take-up also increased individual take-up significantly and is driven by social norms. Contrary to the company's expectation, vaccination did not reduce sickness absence during the flu season. Getting vaccinated was ineffective with no measurable health externalities from coworker vaccination. We rule out meaningful individual health effects when considering several thresholds of expected vaccine effectiveness. Using a dataset of administrative records on medical diagnoses and employee surveys, we find evidence consistent with vaccination causing moral hazard, which could decrease the effectiveness of vaccination.
    Keywords: health intervention, flu vaccination, sickness-related absence, field experiment, random encouragement design, moral hazard, technology adoption
    JEL: D90 I12 J01 N36
    Date: 2020–01
  5. By: Wang, Jian (Department of Health Management and Health Economics); Iversen , Tor (Department of Health Management and Health Economics); Hennig-Schmidt , Heike (Department of Economics, University of Bonn); Godager , Geir (Department of Health Management and Health Economics)
    Abstract: We quantify patient-regarding preferences by fitting a bounded rationality model to data from an incentivized laboratory experiment, where Chinese medical doctors, German medical students and Chinese medical students decide under different payment schemes. We find a remarkable stability in patient-regarding preferences when comparing subject pools and we cannot reject the hypothesis of equal patient-regarding preferences in the three groups. The results suggest that a health economic experiment can provide knowledge that reach beyond the student subject pool, and that the preferences of decision-makers in one cultural context can be of relevance in a very different cultural context.
    Keywords: Laboratory experiment; Bounded rationality; Payment mechanism; Physician behavio
    JEL: C92 D82 H40 I11 J33
    Date: 2019–04–17
  6. By: Böheim, René (University of Linz); Lackner, Mario (University of Linz); Wagner, Wilhelm (University of Linz)
    Abstract: We analyze data from top-tier professional athletes and find that female and male athletes differ in the timing and in the extent of their reactions to a change of the rules which increased the risk of failure. Male athletes increased risk-taking in the more risky environment immediately after the changes. Female athletes, however, increased risk-taking two years after the rule change. Over time, female athletes reverted to pre-reform risk-taking levels and male athletes' continued to make more risky decisions in the new environment. We attribute our findings to gender differences in competitiveness and risk preferences.
    Keywords: competitiveness, risk-taking, gender differences
    JEL: J16 J44
    Date: 2020–01
  7. By: Cornwell, Christopher; Schmutte, Ian M.; Scur, Daniela
    Abstract: Firms’ hiring and firing decisions affect the entire labor market. Managers often make these decisions, yet the effects of management on labor allocation remains largely unexplored. To study the relationship between a firm’s management practices and how it recruits, retains and dismisses its employees, we link a survey of firm-level management practices to production and employee records from Brazil. We find that firms using structured management practices consistently hire and retain better workers, and fire more selectively. Good production workers match with firms using structured personnel management practices. By contrast, better managers match with firms using structured operations management practices.
    Keywords: labor allocation; managers; management practices; productivity
    JEL: M11 J31
    Date: 2019–08
  8. By: Jin, Zhangfeng; Pan, Shiyuan
    Abstract: This study examines the causes and consequences of incentive pay adoption among Chinese manufacturing firms. First, we find that a higher degree of labor scarcity encourages firms to adopt more incentive pay. Second, using an instrumental variables approach, we find that a 10 percentage point increase in the intensity of incentive pay results in 38% higher firm productivity. Third, the average productivity differences between SOEs and non-SOEs decrease by about 65% after controlling differences in incentive pay adoption. Therefore, facilitating incentive pay adoption among firms with better labor endowments (e.g. SOEs) increases productivity while reduces resource misallocation in developing countries.
    Keywords: Incentive Pay,Firm Productivity,Labor Scarcity,China,Instrumental Variables
    JEL: O14 O33 M52 J33 P31
    Date: 2020
  9. By: Ingo E. Isphording; Ulf Zölitz
    Abstract: This paper introduces peer value-added, a new approach to quantify the total contribution of an individual peer to student performance. Peer value-added captures social spillovers irrespective of whether they are generated by observable or unobservable peer characteristics. Using data with repeated random assignment to university sections, we find that students significantly differ in their peer value-added. Peer value-added is a good out-of-sample predictor of performance spillovers in newly assigned student-peer pairs. Yet, students’ own past performance and other observable characteristics are poor predictors of peer value-added. Peer value-added increases after exposure to better peers, and valuable peers are substitutes for low-quality teachers.
    Keywords: Peer effects, peer value-added, peer capital, spillovers
    JEL: I21 I24 J24
    Date: 2020–03
  10. By: Villeval, Marie Claire
    Abstract: This paper reviews studies conducted in naturally-occurring work environments or in the laboratory on the impact of performance feedback provision and peer effects on individuals' performance. First, it discusses to which extent feedback on absolute performance affects individuals' effort for cognitive or motivational reasons, and how evaluations can be distorted strategically. Second, this paper highlights the positive and negative effects of feedback on relative performance and rank on individuals' productivity and persistence, but also on the occurrence of anti-social behavior. Relative feedback stimulates effort by informing on the marginal return or the marginal cost of effort, and by activating behavioral forces even in the absence of monetary incentives. These behavioral mechanisms relate to self-esteem, status concerns, competitive preferences and social learning. Relative feedback sometimes discourages or distorts effort, notably if people collude or are disappointment averse. In addition to incentive schemes and social preferences, the management of self-confidence affects the way relative feedback impacts productivity. Third, the paper addresses the question of the identification of peer effects on employees' performance, their size, their direction and their heterogeneity along the hierarchy. The mechanisms behind peer effects include conformism, social pressure, rivalry, social learning and distributional preferences, depending on the presence of payoff externalities or technological and organizational externalities.
    Keywords: Feedback,performance,peer effects
    JEL: C9 D91 J3 M5
    Date: 2020

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