nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2022‒03‒21
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Kind or contented? An investigation of the gift exchange hypothesis in a natural field experiment in Colombia By Bogliacino, Francesco; Grimalda, Gianluca; Pipke, David
  2. The Impact of Working Conditions on Mental Health: Novel Evidence from the UK. By Belloni, Michele; Carrino, Ludovico; Meschi, Elena
  3. Human Capital Reallocation Across Firms: Evidence from Idiosyncratic Shocks By Erik P. Gilje; Jérôme P. Taillard; Linghang Zeng
  4. Designing Benefits for Platform Workers By Jonathan Gruber
  5. Corporate Flexibility in a Time of Crisis By John W. Barry; Murillo Campello; John Graham; Yueran Ma
  6. Technology Boom, Labor Reallocation, and Human Capital Depreciation By Johan Hombert; Adrien Matray
  7. Eliciting Moral Preferences: Theory and Experiment By Roland Bénabou; Armin Falk; Luca Henkel; Jean Tirole

  1. By: Bogliacino, Francesco (Universidad Nacional de Colombia); Grimalda, Gianluca; Pipke, David
    Abstract: The gift exchange hypothesis postulates that workers reciprocate above market-clearing wages with above-minimum effort. This hypothesis has received inconclusive support in dyadic employer-worker relationships. We present a field-experimental test to assess this hypothesis in the context of a triadic relationship in which only one out of two workers receives a pay increase. We conjecture that inequality aversion motivations may thwart positive reciprocity motivations and analyze the interaction between such motivations theoretically. Across different treatments, the pay increase is assigned to the more productive worker in the initial work session, to the needier worker, or arbitrarily. Two additional conditions in which either none or both workers receive a bonus serve as benchmarks. We find that pay increases lead to decreased productivity. Such a decrease is most sizable in the condition where both workers receive the bonus. A post-diction of this result is that workers interpret the monetary bonus as a signal of the employer’s contentment with their effort, making them feel entitled to reduce their effort. In other treatments, receiving the pay increase while the coworker does not receive a pay increase positively affects productivity, primarily when the pay increase is due to relative productivity. This result is consistent with status-seeking preferences rather than aversion against advantageous inequality. Conversely, not receiving the pay increase while the coworker does, leads to lower productivity, primarily when the pay increase is assigned based on relative needs.
    Date: 2021–11–10
  2. By: Belloni, Michele; Carrino, Ludovico; Meschi, Elena (University of Turin)
    Abstract: This paper investigates the causal impact of working conditions on mental health in the UK, combining new comprehensive longitudinal data on working conditions from the European Working Condition Survey with microdata from the UK Household Longitudinal Survey (Understanding Society). Our empirical strategy accounts for the endogenous sorting of individuals into occupations by including individual fixed effects. It addresses the potential endogeneity of occupational change over time by focusing only on individuals who remain in the same occupation (same ISCO), exploiting the variation in working conditions within each occupation over time. This variation, determined primarily by general macroeconomic conditions, is likely to be exogenous from the individual point of view. Our results indicate that improvements in working conditions have a beneficial, statistically significant, and clinically meaningful impact on depressive symptoms for women. A one standard deviation increase in the skills and discretion index reduces depression score by 2.84 points, which corresponds to approximately 20% of the GHQ score standard deviation, while a one standard deviation increase in working time quality reduces depression score by 0.97 points. The results differ by age: improvements in skills and discretion benefit younger workers (through increases in decision latitude and training) and older workers (through higher cognitive roles), as do improvements in working time quality; changes in work intensity and physical environment affect only younger and older workers, respectively. Each aspect of job quality impacts different dimensions of mental health. Specifically, skills and discretion primarily affect the loss of confidence and anxiety; working time quality impacts anxiety and social dysfunction; work intensity affects the feeling of social dysfunction among young female workers. Finally, we show that improvements in levels of job control (higher skills and discretion) and job demand (lower intensity) lead to greater health benefits, especially for occupations that are inherently characterised by higher job strain.
    Date: 2022–01
  3. By: Erik P. Gilje; Jérôme P. Taillard; Linghang Zeng
    Abstract: We study human capital reallocation following firm-specific idiosyncratic shocks. Theory offers diverging predictions as to whether human capital gets reallocated to its most productive use following these shocks. To empirically test these predictions, we focus on relegation battles in the English Premier League. This setting offers well identified idiosyncratic shocks as well as both individual-level and firm-level productivity metrics. We find that human capital exits firms after a negative idiosyncratic shock. Specifically, we find that more productive players move to more productive clubs and maintain their long-term productivity. They get replaced with lower productivity players. Overall, our results show that in a setting with highly transferable skills, idiosyncratic shocks lead to a reallocation of human capital that moves an industry towards a better overall match between individual-level and firm-level productivity.
    JEL: G31 G32 G33 J24
    Date: 2022–02
  4. By: Jonathan Gruber
    Abstract: Designing benefits for the growing platform workforce in the U.S. poses significant challenges. While platform workers need protection against unforeseen shocks, work that is often part time and spread across multiple platforms makes the traditional benefits model untenable. This paper reports the results from a survey of drivers and couriers working with Uber to help understand their benefits preferences. We find that there is a wide diversity across these workers in platform earnings, the share of platform earnings from Uber, the share of family earnings from platform work and the availability of benefits from other jobs. We use willingness-to-pay questions to show that workers are willing to trade off additional income for benefits; after accounting for the tax advantage of benefits, workers are roughly indifferent on average between the two. While there are some trends in valuation, such as higher valuation for pension than for health contributions, the most notable feature of the data is the wide variation across workers in their preferences across benefits types and relative to income. Workers also show a preference for benefits that can help them commit to increase savings in the future.
    JEL: I13 J32 J41
    Date: 2022–02
  5. By: John W. Barry; Murillo Campello; John Graham; Yueran Ma
    Abstract: We use the COVID shock to study the direct and interactive effects of several forms of corporate flexibility on short- and long-term real business plans. We find that i) workplace flexibility, namely the ability for employees to work remotely, plays a central role in determining firms’ employment plans during the health crisis; ii) investment flexibility allows firms to increase or decrease capital spending based on their business prospects in the crisis, with effects shaped by workplace flexibility; and iii) financial flexibility contributes to stronger employment and investment, in particular when fixed costs are high. While the role of workplace flexibility is new to the COVID crisis, CFOs expect lasting effects for years to come: high workplace flexibility firms foresee continuation of remote work, stronger employment recovery, and shifting away from traditional capital investment, whereas low workplace flexibility firms rely more on automation to replace labor.
    JEL: G01 G17 G31
    Date: 2022–02
  6. By: Johan Hombert (HEC Paris); Adrien Matray (Princeton University)
    Abstract: During the late 1990s boom, one-third of skilled labor market entrants joined the Information and Communication Technology (ICT) sector. We use French linked employer-employee data to study their wage dynamics. Despite starting with 5% higher wages, these workers experience lower wage growth and end up with 6% lower wages fifteen years out, relative to similar workers who started in other sectors. The long-run wage discount is not explained by selection, job losses or persistently low demand for ICT services. It is concentrated in STEM occupations, consistent with obsolescence of technical skills accelerating during a technological boom.
    Keywords: Labor, Employment, France
    JEL: E24 J24 O33
    Date: 2021–12
  7. By: Roland Bénabou (Princeton University); Armin Falk (Institute on Behavior and Inequality (briq) and University of Bonn); Luca Henkel (University of Bonn); Jean Tirole (University of Toulouse Capitole)
    Abstract: We examine to what extent a person’s moral preferences can be inferred from observing their choices, for instance via experiments, and in particular, how one should interpret certain behaviors that appear deontologically motivated. Comparing the performance of the direct elicitation (DE) and multiple-price list (MPL) mechanisms, we characterize in each case how (social or self) image motives inflate the extent to which agents behave prosocially. More surprisingly, this signaling bias is shown to depend on the elicitation method, both per se and interacted with the level of visibility: it is greater under DE for low reputation concerns, and greater under MPL when they become high enough. We then test the model’s predictions in an experiment in which nearly 700 subjects choose between money for themselves and implementing a 350e donation that will, in expectation, save one human life. Interacting the elicitation method with the decision’s level of visibility and salience, we find the key crossing effect predicted by the model. We also show theoretically that certain Kantian postures, turning down all prices in the offered range, easily emerge under MPL when reputation becomes important enough.
    Keywords: Morals, Choices, Decision-making
    JEL: D90 D91
    Date: 2020–09

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