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on Human Capital and Human Resource Management |
| By: | Kuan-Ming Chen; Claire Ding; John A. List; Magne Mogstad |
| Abstract: | Recent changes in labor arrangements have increased interest in estimating and understanding the value of job flexibility. We leverage a large natural field experiment at Uber to create exogenous variation in expected market wages across individuals and over time. Combining this experiment with high frequency panel data on wages and individual work decisions, we document how labor supply responds to exogenous changes in expected market wages in a setting with virtually no restrictions on driver labor allocation. We find that there is i) systematic heterogeneity in labor supply responses both across drivers and within a driver over time, ii) significant fixed costs of beginning a shift, and iii) high rider demand when it is costly for drivers to work. These three findings motivate a model of labor supply with heterogenous preferences over work schedules, adjustment costs, and statistical dependence between market wages and the costs of driving. We recover the labor supply elasticities and reservation wages of this dynamic labor supply model via a combination of experimental estimates and other data moments. We then perform counterfactual analyses that allow us to examine how preference heterogeneity and adjustment costs influence the responses of workers' to wage incentives as well as infer drivers' willingness to pay for the ability to customize and adjust their work schedule. We also show that a static approach to the driver's dynamic problem delivers materially different estimates of workers' labor supply elasticities and their value of job flexibility. |
| JEL: | C93 J2 J3 J4 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27807&r=all |
| By: | Matthew J. Walker (Durham University Business School); Elena Katok (Naveen Jindal School of Management, University of Texas at Dallas); Jason Shachat (Durham University Business School) |
| Abstract: | When product quality is unverifiable by third parties, enforceable contracts that condition price upon quality are not feasible. If higher quality is also costly to deliver, moral hazard by sellers flourishes, particularly when procurement is via a competitive auction process. Retainage is a contractual mechanism that presents a solution to the third-party unverifiability problem, by setting aside a portion of the purchase price. After delivery, the buyer has sole discretion over the amount of retainage money that is released to the seller. While generally a feasible contract form to implement, retainage introduces a moral hazard for the buyer. We use laboratory experiments to investigate how and when retainage might be successfully used to facilitate trust and trustworthiness in procurement contracts. We observe that retainage induces a significant improvement in product quality when there are some trustworthy buyers in the population, consistent with a model of fair payment norms that we develop. This improvement is realized at the cost of increased buyer-seller profit inequalities. We also observe that at high levels of retainage, there is a welfaredecreasing market unraveling in which sellers do not bid on contracts. Our results imply that retainage incentives can mitigate the tension between competition and cooperation arising from reverse auctions, but only at appropriate levels of retainage |
| Keywords: | trust, procurement, reverse auction, retainage, moral hazard |
| JEL: | C92 L15 D86 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:20-34&r=all |
| By: | Adams-Prassl, Abigail (University of Oxford); Balgova, Maria (IZA); Qian, Matthias (University of Oxford) |
| Abstract: | In this paper, we analyze firm demand for flexible jobs by exploiting the language used to describe work arrangements in job vacancies. We take a supervised machine learning approach to classify the work arrangements described in more than 46 million UK job vacancies. We highlight the existence of very different types of flexibility amongst low and high wage vacancies. Job flexibility at low wages is more likely to be offered alongside a wage-contract that exposes workers to earnings risk, while flexibility at higher wages and in more skilled occupations is more likely to be offered alongside a fixed salary that shields workers from earnings variation. We show that firm demand for flexible work arrangements is partly driven by a desire to reduce labor costs; we find that a large and unexpected change to the minimum wage led to a 7 percentage point increase in the proportion of flexible and non-salaried vacancies at low wages. |
| Keywords: | flexible jobs, minimum wage, labor demand |
| JEL: | J23 J31 J80 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13691&r=all |
| By: | Leaver, Clare (University of Oxford); Ozier, Owen (Williams College); Serneels, Pieter (University of East Anglia); Zeitlin, Andrew (Georgetown University) |
| Abstract: | This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay-for-performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a pay- for-percentile or fixed-wage contract. Once recruits were placed, an unexpected, incentive-compatible, school-level re-randomization was performed, so that some teachers who applied for a fixed-wage contract ended up being paid by P4P, and vice versa. By the second year of the study, the within-year effort effect of P4P was 0.16 standard deviations of pupil learning, with the total effect rising to 0.20 standard deviations after allowing for selection. |
| Keywords: | pay-for-performance, selection, incentives, teachers, field experiment |
| JEL: | C93 I21 J45 M52 O15 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13696&r=all |
| By: | Aalto, Aino-Maija (SOFI, Swedish Institute for Social Research, Stockholm University.) |
| Abstract: | Same-gender teachers may affect educational preferences by acting as role models for their students. I study the importance of the gender composition of teachers in mathematics and science in lower secondary schools on the likelihood of continuing on math-intensive tracks in the next levels of education. I use population wide register data from Sweden and control for family fixed effects to account for sorting into schools. According to my results, if the share of female science teachers is increased from none to all, there is, if at all, only a slight positive effect on the likelihood of girls completing a STEM track at upper secondary school, while the probability of completing a math-intensive degree at university increases by 26 percent. There is no positive impact on the performance of students by the higher share of female science teachers. As only the likelihood of choosing science is affected, these results suggest that the effects indeed arise because female teachers of these subjects serve as role models for female students. However, compared to earlier studies, the effects found are very modest. |
| Keywords: | Role models; gender segregation; human capital; STEM |
| JEL: | J16 J24 |
| Date: | 2020–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2020_010&r=all |
| By: | Laura Ehrmantraut (University of Bonn); Pia Pinger (University of Cologne and briq); Renske Stans (Erasmus University) |
| Abstract: | This paper explores students' expectations about the returns to completing higher education and provides first evidence on perceived signaling and human capital effects. We conducted a survey among a large and diverse sample of students at different stages of higher education to elicit counterfactual labor market expectations for the hypothetical scenarios of leaving university with or without a degree certificate. Our findings indicate substantial perceived returns to higher education. Moreover, using within-individual fixed effects models, we document substantial expected labor market returns from signaling, whereas perceived productivity-enhancing (human capital) returns seem to be less pronounced. Over the expected course of career, we find lasting education premia as well as evidence consistent with employer learning. |
| Keywords: | higher education, returns to education, signaling, educational attainment, licensing |
| JEL: | I21 I23 I26 J24 J31 J44 J32 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2020-070&r=all |
| By: | Mari, Gabriele; Luijkx, Ruud |
| Abstract: | We ran a survey experiment with Dutch employers to investigate hiring discrimination in sex-typical jobs. We ask if women are especially discriminated against when they have children, whether discrimination applies similarly in different occupations, and whether statistical discrimination or status-characteristic theories best account for discriminatory practices (if any). Employers rate fictitious candidates for either a female-typical job (primary-school teacher) or a male-typical job (software engineer). Employers are found to display a slight preference for female candidates when filling a teacher post, although such bias is less strong for female applicants with children. No such ranking is found for a software engineer vacancy, nor do we find different salary offers across candidates and across vacancies. Employers do not appear to favour men over women for positions likely to be on the career track, as predicted by statistical discrimination theories, nor do they expect women to be less capable than men, as posited by status-characteristic theory. Female candidates with children, however, are expected to be less committed to their job and work fewer hours, especially in the teacher experiment. Such expectations seem to have small consequences for the hiring decisions and salary offers Dutch employers make in our study. |
| Date: | 2020–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:kwdyp&r=all |
| By: | Ruben C. Arslan; Martin Brümmer; Thomas Dohmen; Johanna Drewelies; Ralph Hertwig; Gert G. Wagner |
| Abstract: | People differ in their willingness to take risks. Recent work found that revealed preference tasks (e.g., laboratory lotteries)—a dominant class of measures—are outperformed by survey-based stated preferences, which are more stable and predict real-world risk taking across different domains. How can stated preferences, often criticised as inconsequential “cheap talk,” be more valid and predictive than controlled, incentivized lotteries? In our multimethod study, over 3,000 respondents from population samples answered a single widely used and predictive risk-preference question. Respondents then explained the reasoning behind their answer. They tended to recount diagnostic behaviours and experiences, focusing on voluntary, consequential acts and experiences from which they seemed to infer their risk preference. We found that third-party readers of respondents’ brief memories and explanations reached similar inferences about respondents’ preferences, indicating the intersubjective validity of this information. Our results help unpack the self perception behind stated risk preferences that permits people to draw upon their own understanding of what constitutes diagnostic behaviours and experiences, as revealed in high-stakes situations in the real world. |
| Keywords: | risk preferences, self-reports, revealed preferences, intersubjective validity, BASE-II, SOEP-IS |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1104&r=all |