nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2021‒08‒23
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Internal Labor Markets: A Worker Flow Approach By Huitfeld, Ingrid; Kostol, Andreas Ravndal; Nimczik, Jan Sebastian; Weber, Andrea
  2. Communication within Firms: Evidence from CEO Turnovers By Stephen Michael Impink; Andrea Prat; Raffaella Sadun
  3. Uninformative Performance Signals and Forced CEO Turnover By Raphael Flepp
  4. Employment Protection, Workforce Mix and Firm Performance By Ardito, Chiara; Berton, Fabio; Pacelli, Lia; Passerini, Filippo
  5. What Happens When Employers Can No Longer Discriminate in Job Ads? By Kuhn, Peter J.; Shen, Kailing
  6. The long shadow of an infection: COVID-19 and performance at work By Fischer, Kai; Reade, J. James; Schmal, W. Benedikt
  7. Estimating Time Preferences for Leisure By Bigoni, Maria; Dragone, Davide; Luchini, Stéphane; Prati, Alberto

  1. By: Huitfeld, Ingrid (Statistics Norway); Kostol, Andreas Ravndal (Arizona State University); Nimczik, Jan Sebastian (European School of Management and Technology (ESMT)); Weber, Andrea (Central European University)
    Abstract: This paper develops a new method to study how workers’ career and wage profiles are shaped by internal labor markets (ILM) and job hierarchies in firms. Our paper tackles the conceptual challenge of organizing jobs within firms into hierarchy levels by proposing a data-driven ranking method based on observed worker flows between occupations within firms. We apply our method to linked employer-employee data from Norway that records fine-grained occupational codes and tracks contract changes within firms. Our findings confirm existing evidence that is primarily based on case studies for single firms. We expand on this by documenting substantial heterogeneity in the structure and hierarchy of ILMs across a broad range of large firms. Our findings on wage and promotion dynamics in ILMs are consistent with models of careers in organizations.
    Keywords: internal labor markets, organization of labor, wage setting
    JEL: J31 J62 M5
    Date: 2021–08
  2. By: Stephen Michael Impink; Andrea Prat; Raffaella Sadun
    Abstract: This paper uses novel, firm-level measures derived from communications metadata before and after a CEO transition in 102 firms to study if CEO turnover impacts employees’ communication flows. We find that CEO turnover leads to an initial decrease in intra-firm communication, followed by a significant increase approximately five months after the CEO change. The increase is driven primarily by vertical (i.e. manager to employee) communication. Greater increases in communication after CEO change are associated with greater increases in firm market returns.
    JEL: L2 M12
    Date: 2021–07
  3. By: Raphael Flepp (Department of Business Administration, University of Zurich)
    Abstract: This paper provides evidence that corporate boards violate the informativeness principle in their forced CEO turnover decisions by failing to ignore uninformative performance outcome signals. I show that CEOs of firms with barely positive shareholder returns in the previous year are less likely to be dismissed than CEOs of firms with barely negative returns, even though this return outcome is conditionally uninformative. I observe a similar pattern for stock returns relative to the S&P 500 index return: a firm's board is less likely to dismiss its CEO if the firm barely outperformed the S&P 500 index than if the firm barely underperformed the S&P 500 index. Moreover, I demonstrate that the tendency of boards to consider uninformative absolute return outcomes has decreased over time, while their tendency to consider uninformative relative return outcomes has increased over time. This suggests that boards have shifted their focus toward relative returns while continuing to violate the informativeness principle.
    Keywords: forced CEO turnover, board of directors, informativeness principle, outcome bias, regression discontinuity design
    JEL: G30 M51 D23
    Date: 2021–08
  4. By: Ardito, Chiara (University of Turin); Berton, Fabio (University of Turin); Pacelli, Lia (University of Turin); Passerini, Filippo (Catholic University Milan)
    Abstract: We measure the impact of employment protection reduction in an uncertain framework on firms' hires and performance, exploiting the Italian 2015 Jobs Act. Results indicate that firms (1) stabilize workforce mainly through contract transformations of low-tenure and low-human-capital incumbent workers performing high-physical and low-intellectual tasks; (2) apply a cost-saving strategy that increases profits and decreases value added per-head. Effects are stronger among non-exporting and non-innovative firms. Our evidence casts doubts on the effectiveness of employment protection reductions in enhancing productivity in the long run.
    Keywords: employment protection, human capital, productivity, tenure, tasks
    JEL: J08 J21 J24
    Date: 2021–07
  5. By: Kuhn, Peter J. (University of California, Santa Barbara); Shen, Kailing (Australian National University)
    Abstract: When employers' explicit gender requests were unexpectedly removed from a Chinese job board overnight, pools of successful applicants became more integrated: women's (men's) share of call-backs to jobs that had requested men (women) rose by 63 (146) percent. The removal 'worked' in this sense because it generated a large increase in gender-mismatched applications, and because those applications were treated surprisingly well by employers. The removal had little or no effect on aggregate matching frictions. The job titles that were integrated however, were not the most gendered ones, and were disproportionately lower-wage jobs.
    Keywords: gender, recruiting, job search, gender segregation, discrimination
    JEL: J16 J63 J71
    Date: 2021–07
  6. By: Fischer, Kai; Reade, J. James; Schmal, W. Benedikt
    Abstract: The COVID-19 pandemic has caused economic shock waves across the globe. Much research addresses direct health implications of an infection, but to date little is known about how this shapes lasting economic effects. This paper estimates the workplace productivity effects of COVID-19 by studying performance of soccer players after an infection. We construct a dataset that encompasses all traceable infections in the elite leagues of Germany and Italy. Relying on a staggered difference-in-differences design, we identify negative short- and longer-run performance effects. Relative to their preinfection outcomes, infected players' performance temporarily drops by more than 6%. Over half a year later, it is still around 5% lower. The negative effects appear to have notable spillovers on team performance. We argue that our results could have important implications for labor markets and public health in general. Countries and firms with more infections might face economic disadvantages that exceed the temporary pandemic shock due to potentially long-lasting reductions in productivity.
    Keywords: Labor Performance,Economic Costs of COVID-19,Public Health
    JEL: I18 J24 J44
    Date: 2021
  7. By: Bigoni, Maria (University of Bologna); Dragone, Davide (University of Bologna); Luchini, Stéphane (Aix-Marseille University); Prati, Alberto (Aix-Marseille University)
    Abstract: We study time preferences by means of a longitudinal lab experiment involving both monetary and non-monetary rewards (leisure). Our novel design allows to measure whether participants prefer to anticipate or delay gratification, without imposing any structural assumption on the instantaneous utility, intertemporal utility or the discounting functions. We find that most people prefer to anticipate monetary rewards (positive time preferences for money), but they delay non-monetary rewards (negative time preferences for leisure). These results cannot be explained by personal timetables and heterogeneous preferences only. They invite to reconsider the psychological interpretation of the discount factor, and suggest that the assumption that discounting is consistent across domains can lead to non-negligible prediction errors in models involving non-monetary decisions, such as labor supply models.
    Keywords: consistency across domains, negative discounting, laboratory experiment, non-monetary rewards
    JEL: C91 D01 D91 J22
    Date: 2021–07

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