nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2020‒11‒16
six papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. How Does Working-Time Flexibility Affect Worker's Productivity in a Routine Job? Evidence from a Field Experiment By Marie Boltz; Bart Cockx; Luz Magdalena Salas
  2. Measuring workers' financial incentives By Bias, Daniel; Chen, Lin; Lochner, Benjamin; Schmid, Thomas
  3. Marginal returns to talent for material risk takers in banking By Stieglitz, Moritz; Wagner, Konstantin
  4. Peer Effects on Job Satisfaction from Exposure to Elderly Workers By KAWATA Yuji; OWAN Hideo
  5. Whoever You Want Me to Be: Personality and Incentives By McGee, Andrew; McGee, Peter
  6. Occupational Mobility of Routine Workers By Terhi Maczulskij

  1. By: Marie Boltz (Centre d'Economie de la Sorbonne & BETA - Université de Strasbourg); Bart Cockx (Ghent University, IZA - Bonn, CESifo - Munich, IRES - Université catholique de Louvain, ROA - Maastricht University; Pontificia Universidad Javeriana, Departmento de Economia); Luz Magdalena Salas (Pontificia Universidad Javeriana, Departmento de Economia)
    Abstract: We conducted an experiment in which we hired workers under different types of contracts to evaluate how flexible working time affects on-the-job productivity in a routine job. Our approach breaks down the global impact on productivity into sorting and behavioral effects. We find that all forms of working-time flexibility reduce the length of workers' breaks. For part-time work, these positive effects are globally counterbalanced. Yet arrangements that allow workers to decide when to start and stop working increase global productivity by as much as 50 percent, 40 percent of which is induced by sorting
    Keywords: Flexible work arrangements; part-time work, productivity; labor market flexibility; work-life balance
    JEL: J21 J22 J23 J24 J33
    Date: 2020–10
  2. By: Bias, Daniel; Chen, Lin; Lochner, Benjamin; Schmid, Thomas
    Abstract: We propose a novel measure for workers' financial incentives based on withinestablishment wage differences among similar workers from the same occupation. This measure captures all forms of incentive pay that lead to workeremployer-specific pay premiums, including explicit (e.g., bonuses) and implicit forms (e.g., tournaments). We estimate the measure using a linked workerestablishment-firm dataset that covers 31 million workers in Germany. For validation, we exploit survey-based information on performance pay and variation in monitoring costs due to occupational characteristics, establishment size, and task complexity and show that the measure behaves as theoretically predicted. Applying the measure yields evidence that workers' incentives positively correlate with firms' performance and innovativeness, which supports a positive relationship between incentives and effort.
    Date: 2020
  3. By: Stieglitz, Moritz; Wagner, Konstantin
    Abstract: Economies of scale can explain compensation differentials over time, across firms of different size, different hierarchy-levels, and different industries. Consequently, the most talented individuals tend to match with the largest firms in industries where marginal returns to their talent are greatest. We explore a new dimension of this size-pay nexus by showing that marginal returns also differ across activities within firms and industries. Using hand-collected data on managers in European banks well below the level of executive directors, we find that the size-pay nexus is strongest for investment banking business units and for banks with a market-based business model. Thus, managerial compensation is most sensitive to size increases for activities that can easily be scaled up.
    Keywords: banks,business models,marginal returns to talent
    JEL: G21 G24 G34
    Date: 2020
  4. By: KAWATA Yuji; OWAN Hideo
    Abstract: The Elderly Employment Stabilization Law revised in 2006 helped the government to increase elderly employment. Although there has been a discussion of whether the re-employment of elderly workers substitutes or complements the employment of young workers, there are few studies that examine potential peer effects of the former group on the latter's productivity or motivation in the workplace. Note that there might be knowledge spillovers from elderly workers to peers, especially younger ones (positive peer effects) but the presence of unmotivated elderly workers might demoralize peers (negative peer effects). This paper investigates such peer effects from the exposure to elderly workers using the employee satisfaction survey of a Japanese firm. We show that elderly workers do not have significant peer effects on coworkers' satisfaction on average. However, the effects are heterogeneous depending on the ability of the elderly workers, reflected in their wages, and the age and job levels of their peers. Namely, regular workers are more satisfied when they work with elderly workers who receive higher wages. Coworkers in their 30s and 40s receive more training and those in their 50s are more satisfied when they work with elderly workers. In contrast, first line managers are less satisfied by the allocation of elderly workers, especially those with high levels of ability. This paper contributes to the discussion on the efficient assignment of elderly workers.
    Date: 2020–11
  5. By: McGee, Andrew (University of Alberta); McGee, Peter (National University of Singapore)
    Abstract: What can employers learn from personality tests when job applicants have incentives to misrepresent themselves? Using a within-subject, laboratory experiment, we compare personality measures with and without incentives for misrepresentation. Incentivized personality measures are weakly to moderately correlated with non-incentivized measures in most treatments but are correlated with intelligence when test-takers have information about desired personalities or are warned that responses may be verified. We document that actual job ads provide information about desired personalities and that employers in the UK who administer personality tests are also likely to administer intelligence tests despite the potential for substitution between the tests.
    Keywords: personality, measurement, hiring, screening, experiments
    JEL: C91 D82 M50
    Date: 2020–10
  6. By: Terhi Maczulskij
    Abstract: This paper analyzes occupational polarization within and across workers, as well as the occupational mobility of routine workers, using comprehensive data from Finland. As in most industrialized countries, job markets have polarized over the last few decades. Decomposition analysis shows that the upper tail of occupational polarization is largely a with-workers phenomenon, indicating that workers have moved to abstracts tasks. In contrast, the share of low-level service tasks increases largely through entry dynamics. The direction of occupational mobility is nevertheless linked with the task content in origin jobs. Conditional on observed general and specific human capital, routine cognitive workers are more likely to move up in the hierarchy, while routine manual workers are more likely to move to low-skilled service occupations. Data on plant closures and mass lay-offs are also used to identify involuntary separations from routine occupations. These results demonstrate similar strong uneven adjustment pattern, with routine cognitive workers being more able to adjust with smaller employment disruptions and wage costs.
    Keywords: Job market polarization, routine manual, routine cognitive, occupational mobility, displacement
    JEL: J23 J62
    Date: 2019–04–15

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