nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2020‒06‒08
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Responding to (Un)Reasonable Requests by an Authority By Vittorio Pelligra; Tommaso Reggiani; Daniel John Zizzo
  2. Team Players: How Social Skills Improve Group Performance By Ben Weidmann; David J. Deming
  3. Workforce Composition, Productivity and Pay: The Role of Firms in Wage Inequality By Criscuolo, Chiara; Hijzen, Alexander; Schwellnus, Cyrille; Chen, Wen-Hao; Fabling, Richard; Fialho, Priscilla; Grabska, Katarzyna; Kambayashi, Ryo; Leidecker, Timo; Nordström Skans, Oskar; Riom, Capucine; Roth, Duncan; Stadler, Balazs; Upward, Richard; Zwysen, Wouter
  4. The Optimal Assortativity of Teams Inside the Firm By Ashwin Kambhampati; Carlos Segura-Rodriguez
  5. On the paradox of mediocracy By Fu, Qiang; Li, Ming; Qiao, Xue
  6. Gender-Specific Duration of Parental Leave and Current Earnings By Gerst, Benedikt; Grund, Christian
  7. Within-School Heterogeneity in Quality: Do Schools Provide Equal Value Added to All Students? By Naven, Matthew
  8. Wages, Hires, and Labor Market Concentration By Marinescu, Ioana E.; Ouss, Ivan; Pape, Louis-Daniel
  9. Work meaning and labor supply By Iris Kesternich; Heiner Schumacher; Bettina Siflinger; Stefan Schwarz

  1. By: Vittorio Pelligra (University of Cagliari); Tommaso Reggiani (Cardiff University, Masaryk University & IZA); Daniel John Zizzo (University of Queensland)
    Abstract: We consider the notions of static and dynamic reasonableness of requests by an authority in a trust game experiment. The authority, modelled as the experimenter, systematically varies the experimental norm of what is expected from trustees to return to trustors, both in terms of the level of each request and in terms of the sequence of the requests. Static reasonableness matters in a self-biased way, in the sense that low requests justify returning less, but high requests tend to be ignored. Dynamic reasonableness also matters, in the sense that, if requests keep increasing, trustees return less compared to the same requests presented in random or decreasing order. Requests never systematically increase trustworthiness but may decrease it.
    Keywords: trust, trustworthiness, authority, reasonableness, moral wiggle room, moral licensing
    JEL: C91 D01 D03 D63
    Date: 2020–05–19
  2. By: Ben Weidmann; David J. Deming
    Abstract: Most jobs require teamwork. Are some people good team players? In this paper we design and test a new method for identifying individual contributions to group performance. We randomly assign people to multiple teams and predict team performance based on previously assessed individual skills. Some people consistently cause their group to exceed its predicted performance. We call these individuals “team players”. Team players score significantly higher on a well-established measure of social intelligence, but do not differ across a variety of other dimensions, including IQ, personality, education and gender. Social skills – defined as a single latent factor that combines social intelligence scores with the team player effect – improve group performance about as much as IQ. We find suggestive evidence that team players increase effort among teammates.
    JEL: J01
    Date: 2020–05
  3. By: Criscuolo, Chiara (OECD); Hijzen, Alexander (OECD); Schwellnus, Cyrille (OECD); Chen, Wen-Hao (OECD); Fabling, Richard (Independent Researcher); Fialho, Priscilla (OECD); Grabska, Katarzyna (Maastricht University); Kambayashi, Ryo (Hitotsubashi University); Leidecker, Timo (OECD); Nordström Skans, Oskar (Uppsala University); Riom, Capucine (London School of Economics); Roth, Duncan (Institute for Employment Research (IAB), Nuremberg); Stadler, Balazs (OECD); Upward, Richard (University of Nottingham); Zwysen, Wouter (ISER, University of Essex)
    Abstract: In many OECD countries, low productivity growth has coincided with rising inequality. Widening wage and productivity gaps between firms may have contributed to both developments. This paper uses a new harmonised cross-country linked employer-employee dataset for 14 OECD countries to analyse the role of firms in wage inequality. The main finding is that, on average across countries, changes in the dispersion of average wages between firms explain about half of the changes in overall wage inequality. Two thirds of these changes in between-firm wage inequality are accounted for by changes in productivity-related premia that firms pay their workers above common market wages. The remaining third can be attributed to changes in workforce composition, including the sorting of high-skilled workers into high-paying firms. Over all, these results suggest that firms play an important role in explaining wage inequality as wages are driven to a significant extent by firm performance rather than being exclusively determined by workers' earnings characteristics.
    Keywords: firm wage premium, wage inequality, productivity
    JEL: D2 J31 J38
    Date: 2020–05
  4. By: Ashwin Kambhampati (University of Pennsylvania); Carlos Segura-Rodriguez (Central Bank of Costa Rica)
    Abstract: How does a profit-maximizing manager form teams and compensate workers in the presence of both adverse selection and moral hazard? Under complete information, it is well known that any complementarity in characteristics implies that positive assortative matching is productively efficent. But, under asymmetric information, we uncover the problem of disassortative incentives: incentive costs may increase in assortativity. Profit maximization thus prescribes either random or negative assortative matching, both productively inefficient, when complementarities are weak and eort costs are high enough. When this is the case, the manager may instead prefer to delegate matching, allowing workers to sort themselves into teams. Our results shed light on recent empirical work documenting patterns of non-assortative matching inside of firms.Length: 49 pages
    Keywords: Asymmetric Information, Assortative Matching, Delegation, Teams
    JEL: C78 D86 L23
    Date: 2020–05–17
  5. By: Fu, Qiang (National University of Singapore); Li, Ming (Concordia University, CIRANO, and CIREQ); Qiao, Xue (Renmin University of China)
    Abstract: We consider a two-agent hierarchical organization with a leader and a manager in a reputation-signaling model. The manager proposes an innovative but risky projectto the leader, and decides whether to exert an effort to improve the value of the project, which benefi ts the organization. The leader decides whether to endorse the project or block it. The leader's competence is her private information, and the market updates its belief about the leader's type based on observation of her action (endorsing the project or blocking it) and its outcome. In equilibrium, the leader could behave excessively conservatively when she is subject to reputation concerns. We have two main fi ndings. First, aside from its usual distortionary effects, the leader's reputation concern has a benefi cial effect by inducing the manager to supply productive effort and improves the organization's performance. Second, there exists a non-monotonic relationship between the perceived competence of the leader and the performance ofthe organization. As a result, a paradox of mediocracy emerges: The organization may benefi t from a seemingly mediocre leader, as a mediocre leader motivates the manager to exert effort, which offsets the efficiency loss due to incorrect decisions.
    Keywords: Leadership, Meritocracy, Organizational Performance, Reputation Concerns, Managerial Effort
    JEL: C72 D23 D72 D82
    Date: 2018–08
  6. By: Gerst, Benedikt (RWTH Aachen University); Grund, Christian (RWTH Aachen University)
    Abstract: Although male employees are increasingly making use of parental leave, gender differences in both usage and duration of parental leave are still prevalent. In this contribution, we explore the role of gender for the relation between the incidence/duration of parental leave and earnings after returning to a job. We use data on middle managers in the German chemical industry and show that parental leave pay gaps are much more severe for males than they are for females.
    Keywords: compensation, gender, parental leave, stigma, wages
    JEL: M52 M12 J16 J31
    Date: 2020–05
  7. By: Naven, Matthew
    Abstract: Low-socioeconomic status (SES), minority, and male students perform worse than their high-SES, non-minority, and female peers on standardized tests. This paper investigates how within-school differences in school quality contribute to these educational achievement gaps by SES, ethnicity, and sex. Using individual-level data on the universe of public-school students in California, I estimate school quality using a value added methodology that accounts for the fact that students sort to schools on observable characteristics. I run three separate analyses, in which I allow each school to provide a distinct value added to their low-/high-SES, minority/non-minority, and male/female students. I find that there is within-school heterogeneity in value added by SES, ethnicity, and sex, as on average schools provide less value added to their low-SES, minority, and male students. Thus within-school heterogeneity in quality is one factor that contributes to differential outcomes for disadvantaged students.
    Keywords: School Quality; Achievement Gaps; Inequality; Human Capital; Postsecondary Education; Value Added
    JEL: H75 I21 I23 I24 J24
    Date: 2020–05–05
  8. By: Marinescu, Ioana E. (University of Pennsylvania); Ouss, Ivan (CREST (ENSAE)); Pape, Louis-Daniel (CREST (ENSAE))
    Abstract: How does employer market power affect workers? We compute the concentration of new hires by occupation and commuting zone in France using linked employer-employee data. Using instrumental variables with worker and firm fixed effects, we find that a 10% increase in labor market concentration decreases hires by 12.4% and the wages of new hires by nearly 0.9%, as hypothesized by monopsony theory. Based on a simple merger simulation, we find that a merger between the top two employers in the retail industry would be most damaging, with about 24 million euros in annual lost wages for new hires, and an 8000 decrease in annual hires.
    Keywords: labor market concentration, wages, hires, merger simulation
    JEL: J31 J32 J42 L13 J51 L40 L41 L44
    Date: 2020–05
  9. By: Iris Kesternich; Heiner Schumacher; Bettina Siflinger; Stefan Schwarz
    Abstract: We analyze to what extent work meaning – the significance of a job for others or for society – increases the willingness of employed and unemployed individuals to accept a job. To this end, we elicit reservation wages for a one-hour job and randomly vary its description as having either “high” or “low” meaning. Our subjects participate in the “Panel Study of Labour Market and Social Security” (PASS), which comprises a random draw from the German population and a random draw of unemployed individuals from the unemployment register. We can thus link subjects’ experimental behavior to rich survey data and control for selection into the experiment. For subjects who consider work meaning as very important (around one third of PASS respondents), high-meaning reduces the reservation wage by around 18 percent. By contrast, among unemployed individuals, work meaning increases the reservation wage by around 14 percent. We discuss how work meaning can have both positive and negative effects on labor supply when it interacts with fairness concerns or work norms.
    Keywords: Work Meaning, Labor Supply, Unemployment
    Date: 2020–05–14

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