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on Human Capital and Human Resource Management |
| By: | Amodio, Francesco; Martinez-Carrasco, Miguel |
| Abstract: | This paper studies learning within organizations when incentives change. We use a simple principal-agent model to show how, in the presence of imperfect information over the shape of the production function, worker's effort choice changes over time as information is disclosed and processed. We also show that changes in workers compensation can trigger such learning process. We test this hypothesis using personnel records from a Peruvian egg production plant. Exploiting a sudden change in the compensation schedule, we find that workers learn from each other over the shape of the production function. This adjustment process is costly for the firm. |
| Keywords: | Inputs; Organizational Learning; workplace incentives |
| JEL: | D22 D24 J24 J33 M11 M52 M54 O12 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15498&r= |
| By: | Lemos, Renata; Muralidharan, Karthik; Scur, Daniela |
| Abstract: | This paper uses new data to study school management and productivity in India. We report four main results. First, management quality in public schools is low, and ~2 s.d. below high-income countries with comparable data. Second, private schools have higher management quality, driven by much stronger people management. Third, people management quality is correlated with both independent measures of teaching practice, as well as school productivity measured by student value added. Fourth, private school teacher pay is positively correlated with teacher effectiveness, and better-managed private schools are more likely to retain more effective teachers. Neither pattern is seen in public schools. |
| Keywords: | Management Practices; school performance; student value added |
| JEL: | I25 M5 O1 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15659&r= |
| By: | Keller, Wolfgang; Molina, Teresa; Olney, Will |
| Abstract: | This paper examines gender differences among top business executives using a large executive-employer matched data set spanning the last quarter century. Female executives make up 6.2% of the sample and we find they exhibit more labor market churning - both higher entry and higher exit rates. Unconditionally, women earn 26% less than men, which decreases to 7.9% once executive characteristics, firm characteristics, and in particular job title are accounted for. The paper explores the extent to which firm-level temporal flexibility and corporate culture can explain these gender differences. Although we find that women tend to select into firms with temporal flexibility and a female-friendly corporate culture, there is no evidence that this sorting drives the gender pay gap. However, we do find evidence that corporate culture affects pay gaps within firms: the within-firm gender pay gap disappears entirely at female-friendly firms. Overall, while both corporate culture and flexibility affect the female share of employment, only corporate culture influences the gender pay gap. |
| Keywords: | Corporate culture; Executive compensation; Gender pay gap; Women |
| JEL: | F16 J16 J24 J33 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15552&r= |
| By: | Kilian Huber; Volker Lindenthal; Fabian Waldinger |
| Abstract: | Large-scale increases in discrimination can lead to dismissals of highly qualified managers. We investigate how expulsions of senior Jewish managers, due to rising discrimination in Nazi Germany, affected large corporations. Firms that lost Jewish managers experienced persistent reductions in stock prices, dividends, and returns on assets. Aggregate market value fell by roughly 1.8 percent of German GNP because of the expulsions. Managers who served as key connectors to other firms and managers who were highly educated were particularly important for firm performance. The findings imply that individual managers drive firm performance. Discrimination against qualified business leaders causes first-order economic losses. |
| JEL: | D22 E60 G30 J7 J71 M12 N24 N34 N8 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28766&r= |
| By: | Hernán Bejarano (Centro de Investigación y Docencia en Economía de México/Chapman University); Brice Corgnet (EM Lyon Business School); Joaquín Gómez-Miñambres (Lafayette College) |
| Abstract: | We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in the work environment such as those related to unemployment benefits or workers’ productivity levels. Our model shows that these changes spur disagreements between workers and employers regarding the value of the reference wage. These disagreements tend to weaken the gift- exchange relationship thus reducing production levels and wages. We find support for these predictions in a controlled, yet realistic, workplace environment. Our work also sheds light on several stylized facts regarding employment relationships such as the increased intensity of labor conflicts when economic conditions are unstable. |
| Keywords: | Gift-exchange incentives self-serving biases reference-dependent utility laboratory experiments labor conflicts |
| JEL: | C92 D23 M54 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:56&r= |
| By: | Víctor González-Jiménez |
| Abstract: | I show that stochastic contracts are powerful motivational devices when agents distort probabilities. Stochastic contracts allow the principal to target probabilities that, when distorted by the agent, enhance the agent's motivation to exert effort on the delegated task. This novel source of incentives is absent in traditional contracts. A theoretical framework and an experiment demonstrate that stochastic contracts targeting small probabilities, and thus exposing the agent to a large degree of risk, generate higher performance levels than traditional contracting modalities. A result that contradicts the standard rationale that optimal contracts should feature a tradeoff between insurance and efficiency. This unintuitive finding is attributed to probability distortions caused by likelihood insensitivity - cognitive limitations that restrict the accurate evaluation of probabilities. |
| JEL: | C91 C92 J16 J24 |
| Date: | 2101–05 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:2101&r= |
| By: | Müller, Daniel; Schmitz, Patrick W. |
| Abstract: | A principal hires an agent to provide a verifiable service. Initially, the agent can exert unobservable effort to reduce his disutility from providing the service. If the agent is free to waive his right to quit, he may voluntarily sign a contract specifying an inefficiently large service level, while there are insufficient incentives to exert effort. If the agent's right to quit is inalienable, the underprovision of effort may be further aggravated, but the service level is ex post efficient. Overall, it turns out that the total surplus can be larger when agents are not permitted to contractually waive their right to quit work. Yet, we also study an extension of our model in which even the agent can be strictly better off when the parties have the contractual freedom to waive the agent's right to quit. |
| Keywords: | efficiency wages; Incentive theory; Labor contracts; law and economics; moral hazard |
| JEL: | D23 D86 J83 K12 K31 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15567&r= |
| By: | Eduardo Levi Yeyati (Universidad Torcuato Di Tella/The Brookings Institution); Martín Montané (Universidad Torcuato Di Tella) |
| Abstract: | Using job transition data from Argentina’s Household Survey, we document the extent to which human capital is specific to occupations and activities. Based on workers’ propensity to move between occupations/industries, we build Occupation and Industry Spaces to illustrate job similarities, and we compute an occupation and industry similarity measures that, in turn, we use to explain wage transition dynamics. We show that our similarity measures influence positively post-transition wages. Inasmuch as wages capture a worker ´s marginal productivity and this productivity reflects the degree to which a worker matches the job’s skill demand, our results indicate that a worker ´s human capital is specific to both occupation and activity: closer occupations share similar skill demands and task composition (in other words, demand similar workers) and imply a smaller human capital loss in the event of a transition. |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:39&r= |