nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2020‒04‒13
six papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Does improved information improve incentives? By Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel
  2. The effect of ethical responsibility on performance By Stein, Caroline; Untertrifaller, Anna
  3. Paying Outsourced Labor: Direct Evidence from Linked Temp Agency-Worker-Client Data By Drenik, Andres; Jäger, Simon; Plotkin, Pascuel; Schoefer, Benjamin
  4. Behavioral Aspects of Communication in Organizations By Casoria, Fortuna; Riedl, Arno; Werner, Peter
  5. The Gender Pay Gap: Micro Sources and Macro Consequences By Morchio, Iacopo; Moser, Christian
  6. Does Working at a Start-Up Pay Off? By Fackler, Daniel; Hölscher, Lisa; Schnabel, Claus; Weyh, Antje

  1. By: Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel
    Abstract: This paper studies the value of more precise signals on agent performance in an optimal contracting model with endogenous effort. With limited liability, the agent's wage is increasing in output only if output exceeds a threshold, else it is zero regardless of output. If the threshold is sufficiently high, the agent only beats it, and is rewarded for increasing output through greater effort, if there is a high noise realization. Thus, a fall in output volatility reduces effort incentives—information and effort are substitutes—offsetting the standard effect that improved information lowers the cost of compensation. We derive conditions relating the incentive effect to the underlying parameters of the agency problem.
    Keywords: executive compensation; limited liability; options; relative performance evaluation; risk management
    JEL: D86 G32 G34 J33
    Date: 2018–11–01
  2. By: Stein, Caroline; Untertrifaller, Anna
    Abstract: In a laboratory real-effort experiment, we study the effect of responsibility on performance. Specifically, we analyze whether being responsible for an ethical or unethical work environment affects workers’ performance. Using a specific randomization technique, we can separate the responsibility effect from a possible selection effect. We find that workers who prefer to work in an ethical work environment perform better if they are also responsible for it, compared to a situation where it was imposed on them. We do not find this positive incentive effect of responsibility for workers that prefer an unethical work environment. Moreover, we observe that if an unethical environment was imposed, workers who prefer an ethical environment perform worse than those whose preference are aligned with the environment.
    Keywords: real-effort experiment, responsibility, decision rights, incentive, ethical behavior
    JEL: C91 M59
    Date: 2020–03
  3. By: Drenik, Andres (Columbia University); Jäger, Simon (Massachusetts Institute of Technology); Plotkin, Pascuel (University of British Columbia); Schoefer, Benjamin (University of California, Berkeley)
    Abstract: We estimate how much firms differentiate pay premia between regular and outsourced workers. We study temp agency work arrangements where pay setting has previously escaped measurement because existing datasets do not report links between user firms (the workplaces where temp workers perform their labor) and temp agencies (their formal employers). We overcome this measurement challenge by leveraging unique administrative data from Argentina with such links. We estimate that temp agency workers receive 49% of theworkplace-specific pay premia earned by regularworkers in user firms: the midpoint between the benchmark for insiders (one) and the competitive spot-labor market benchmark (zero).
    Keywords: outsourcing, temp agencies, non-standard work arrangements, rent sharing
    JEL: J31 J53 L24
    Date: 2020–03
  4. By: Casoria, Fortuna (GATE, University of Lyon); Riedl, Arno (Maastricht University); Werner, Peter (Maastricht University)
    Abstract: This paper reviews experimental studies that investigate the effects of communication on behavior in organizational settings. Two main classes of studies are identified: (a) studies on coordination and competition, which include experimental research that tests whether communication can help to overcome coordination failure within organizations, and (b) studies that analyze the role of communication in alleviating problems arising from information asymmetries at the workplace. The evidence from these studies indicates that communication is suited to improve efficient coordination within firms and to mitigate information problems in employer-employee relationships. In addition, studies are presented that focus on the interaction between communication and monetary incentive schemes in companies.
    Keywords: communication, organization, experiment, behavior
    JEL: C90 D82 D83 J53
    Date: 2020–02
  5. By: Morchio, Iacopo; Moser, Christian
    Abstract: We assess the sources and consequences of the gender pay gap using a combination of theory and measurement. We start by documenting three empirical facts. First, women are more likely than men to work at low-paying employers. Second, for women as for men, pay is not the sole determinant of workers' revealed-preference rankings of employers. Third, both pay and the revealed-preference rank differ between women and men within the same employer. To interpret these facts, we develop an empirical equilibrium search model featuring endogenous gender differences in pay, amenities, and recruiting intensities across employers. The estimated model suggests that compensating differentials explain one fifth of the gender gap, that there are significant output and welfare gains from eliminating gender differences, and that an equal-pay policy fails to close the gender pay gap.
    Keywords: Worker and Firm Heterogeneity, Misallocation, Compensating Differentials, Discrimination, Empirical Equilibrium Search Model, Linked Employer-Employee Data
    JEL: E24 E25 J16 J31
    Date: 2018–05–11
  6. By: Fackler, Daniel (IWH Halle); Hölscher, Lisa (Halle Institute for Economic Research); Schnabel, Claus (University of Erlangen-Nuremberg); Weyh, Antje (Institute for Employment Research (IAB), Nuremberg)
    Abstract: Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining startups instead of incumbent firms. Applying entropy balancing and following individuals over ten years, we find huge and long-lasting drawbacks from entering a start-up in terms of wages, yearly income, and (un)employment. These disadvantages hold for all groups of workers and types of start-ups analyzed. Although our analysis of different subsequent career paths highlights important heterogeneities, it does not reveal any strategy through which workers joining start-ups can catch up with the income of similar workers entering incumbent firms.
    Keywords: startups, young firms, wages, linked employer-employee data
    JEL: J31 J63 L26 M51
    Date: 2020–03

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