nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2021‒01‒25
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Between the Dockyard and the Deep Blue Sea: Retention and Personnel Economics in the Royal Navy By Glaser, Darrell J.; Rahman, Ahmed S.
  2. Who should pay the bill for employee upskilling? By Radu Vranceanu; Angela Sutan
  3. Gender Differences in Private and Public Goal Setting By Jordi Brandts; Sabrine El Baroudi; Stefanie J. Huber; Cristina Rott
  4. Employer Responses to Family Leave Programs By Ginja, Rita; Karimi, Arizo; Xiao, Pengpeng
  5. Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms By Bassanini, Andrea; Caroli, Eve; Fontaine, Francois; Rebérioux, Antoine
  6. Gender Differences in Performance Under Competition: By Geraldes, Diogo; Riedl, Arno; Strobel, Martin
  7. Can older workers stay productive? The role of ICT skills and training By Jong-Wha Lee; Do Won Kwak; Eunbi Song
  8. Part and Full-Time Employment over the Business Cycle By Griffy, Benjamin; Gomis-Porqueras, Pedro

  1. By: Glaser, Darrell J. (U.S. Naval Academy); Rahman, Ahmed S. (Lehigh University)
    Abstract: This paper tackles some issues in personnel economics using the career profiles of British naval officers during the late 19th and early 20th centuries. We ask how promotions, payouts, positions, and peers affect worker retention. Random variation in task assignments and job promotions allows us to explore factors that affect retention of personnel. We develop a number of key insights. Firm-specific human capital accumulation bolsters retention, while technological changes can undo some of this effect. Other challenges to worker retention include lack of promotion opportunities, and "exit contagion" from exits of former peers. Modernizing organizations may need to enhance promotion opportunities and reorganize certain tasks, or else face loss of skilled personnel.
    Keywords: personnel economics, human capital, job mobility, promotion tournaments, technological change, military personnel, naval history, peer effects
    JEL: J6 J45 J62 N31
    Date: 2021–01
  2. By: Radu Vranceanu (ESSEC Business School - Essec Business School, THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université); Angela Sutan (UBFC - Université Bourgogne Franche-Comté [COMUE])
    Abstract: Upskilling is an investment in human capital that allows a worker to successfully undertake a new task or new project within his/her existing job. It involves costly effort on behalf of the employee to acquire new skills and new knowledge. In this context, one essential question for managers is whether to invest in workers' upskilling or let them pay for the investment in human capital and compensate them accordingly. Using traditional contract theory analysis, we show that the latter choice is not cost-neutral since the most flexible workers benefit of an informational rent. A profit comparison shows that it might be in the interest of a company to invest in worker upskilling, rather than to rely on worker self-training
    Keywords: Contract theory,Upskilling,Screening,Training policy
    Date: 2020–10–01
  3. By: Jordi Brandts; Sabrine El Baroudi; Stefanie J. Huber; Cristina Rott
    Abstract: We conduct a field and an online classroom experiment to study gender differences in self-set performance goals and their effects on performance in a real-effort task. We distinguish between public and private goals, performance being public and identifiable in both cases. Participants set significantly more ambitious goals when these are public. Women choose lower goals than men in both treatments, but in particular when goals are private information. Men perform better than women under private and public goals as well as in the absence of goal setting, consistent with the identifiability of performance causing gender differences, as found in other studies. Compared to private goal setting, public goal setting does not affect men’s performance at all but it leads to women’s performance being significantly lower. Comparing self-set goals with actual performance we find that under private goal setting women’s performance is on average 67% of goals, whereas for men it is 57%. Under public goal setting the corresponding percentages are 43% and 39%, respectively.
    Keywords: Gender Gap, goal setting, public observability, experiment
    JEL: C91 J01 J16 J82
    Date: 2021–01
  4. By: Ginja, Rita (University of Bergen, Department of Economics); Karimi, Arizo (Department of Economics, Uppsala University); Xiao, Pengpeng (Department of Economics, Yale University)
    Abstract: Search frictions make worker turnover costly to firms. A three-month parental leave expansion in Sweden provides exogenous variation that we use to quantify firms’ adjustment costs upon worker absence and exit. The reform increased women’s leave duration and likelihood of separating from pre-birth employers. Firms with greater exposure to the reform hired additional workers and increased incumbent hours, incurring additional wage costs. These adjustment costs varied by firms’ availability of internal and external substitutes. Economy-wide analyses show that a higher reform exposure is correlated with fewer hires and lower starting wages of young women compared to men and older women.
    Keywords: Parental Leave; Firm-Specific Human Capital; Statistical Discrimination
    JEL: J13 J16 J21 J22 J31
    Date: 2020–08–29
  5. By: Bassanini, Andrea (OECD); Caroli, Eve (Université Paris-Dauphine); Fontaine, Francois (Paris School of Economics); Rebérioux, Antoine (Université de Paris)
    Abstract: We develop a simple theoretical model showing that, by adding to the adjustment costs associated with permanent contracts, local social pressure against dismissals creates an incentive for CEOs to rely on fixed-term contracts, in an attempt to escape social pressure. Using linked employer-employee data, we show that establishments located closer to headquarters have higher shares of fixed-term contracts in hiring than those located further away whenever firms' headquarters are located in self-centered communities and the CEO not only works but also lives there. We show that these findings can only be explained by local social pressure.
    Keywords: social pressure, employment contracts, adjustment costs, CEO reputation
    JEL: J23 J41 M14 M55 R12
    Date: 2021–01
  6. By: Geraldes, Diogo; Riedl, Arno (RS: GSBE Theme Human Decisions and Policy Design, Microeconomics & Public Economics); Strobel, Martin (RS: GSBE Theme Human Decisions and Policy Design, Microeconomics & Public Economics)
    Abstract: The gender gap in income and leadership positions in many domains of our society is an undisputed pervasive phenomenon. One explanation for the disadvantaged position of women put forward in the economic and psychology literature is the weaker response of women to competitive incentives. Despite the large amount of literature trying to explain this fact, the precise mechanisms behind the gender difference in competitive responsiveness are still not fully uncovered. In this paper, we use laboratory experiments to study the potential role of stereotype threat on the response of men and women to competitive incentives in mixed-gender competition. We use a real effort math task to induce an implicit stereotype threat against women in one treatment. In additional treatments we, respectively, reinforce this stereotype threat and induce a stereotype threat against men. In contrast to much of the literature we do not observe that women are less competitive than men, neither when there is an implicit nor when there is an explicit stereotype threat against women. We attribute this to two factors which differentiates our experiment from previous ones. We control, first, for inter-individual performance differences using a within-subject design, and, second, for risk differences between non-competitive and competitive environments by making the former risky. We do find an adverse stereotype threat effect on the performance of men when there is an explicit stereotype threat against them. In that case any positive performance effect of competition is nullified by the stereotype threat. Overall, our results indicate that a stereotype threat has negative competitive performance effects only if there is information contradicting an existing stereotype. This suggests that the appropriate intervention to prevent the adverse effect of stereotype threat in performance is to avoid any information referring to the stereotype.
    JEL: C91 D01 J16
    Date: 2021–01–01
  7. By: Jong-Wha Lee; Do Won Kwak; Eunbi Song
    Abstract: This paper quantitatively examines the effects of aging on labor productivity using individual worker data in Korea. We find that attainment of information and communications technology (ICT) skills and participation in job-related training can help older workers stay productive. The estimation results present that ICT skills attainment has a positive effect on the wages of the older workers aged 50–64 with a high level of education or in a skill-intensive occupation. Job training also has a significant positive effect on the wages of older workers. Even compared to younger workers, older well-educated workers can be more productive through higher ICT skills attainment and job-training participation. The evidence suggests that a productivity decrease in line with the aging process can be mitigated by training aging workers to equip themselves with ICT skills.
    Keywords: aging, education, information and communications technology, productivity, skill, training
    JEL: J14 J24 J31 O47
    Date: 2021–01
  8. By: Griffy, Benjamin; Gomis-Porqueras, Pedro
    Abstract: We develop a model that allows us to understand the cyclicality of part and full-time employment. In the model, labor market frictions generate a surplus between workers and firms, who jointly decide whether their employment relationship is best suited for part or full-time work based on match quality shocks and the broader economic environment. Lower acyclical costs cause the surplus of part-time matches to vary less with the business cycle than the surplus of full-time matches. As a consequence, the model is able to generate procyclical full-time employment and countercyclical part-time employment as observed in the data. We also show that ignoring part-time employment understates the impact on employment and inequality of a recession and that subsidizing part-time work is far more effective than increasing unemployment insurance at preventing a labor market downturn.
    Keywords: part-time employment, search, matching, bargaining
    JEL: E24 E30 J31 J6
    Date: 2020–12–21

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