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on Human Capital and Human Resource Management |
| By: | Xiao Ma (Peking University); Alejandro Nakab (Universidad Torcuato Di Tella); Daniela Vidart (University of Connecticut) |
| Abstract: | How do the sources of worker learning change over the lifecycle, and how do these changes a˙ect on-the-job human capital accumulation? We use detailed worker quali-fication data from Germany and the US to document that internal learning (learning through colleagues) decreases with worker experience, while external learning (on-the-job training) has an inverted U-shape in worker experience. To shed light on these findings, we build an analytical model where the incentives to engage in each type of skill acquisition evolve throughout the lifecycle due to shifts in the relative position of the worker in the human capital distribution. We embed this two-source learning mechanism in a quantitative Burdett and Mortensen search framework where firms and workers jointly fund learning investments. The model equilibrium replicates our em-pirical lifecycle results, as well as several key findings in the literature on the e˙ects of firm matching and coworker quality in the formation of human capital. Counterfactual analyses imply that aggregate human capital decreases by approximately 30% in the absence of either learning source, and that the two sources are highly complementary in the aggregate. We conduct a policy analysis that highlights key ineÿciencies to learning investments stemming from firms’ role in learning, and shows that subsidizing learning can generate sizeable increases to human capital and aggregate output. |
| Keywords: | On-the-Job Training, Human Capital Accumulation, Lifecycle Wage Growth |
| JEL: | J24 E24 M53 O15 J62 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2022-11&r= |
| By: | Renjie Bao; Jan de Loecker; Jan Eeckhout |
| Abstract: | To answer the question whether managers are paid for market power, we propose a theory of executive compensation in an economy where firms have market power, and the market for managers is competitive. We identify two distinct channels that contribute to manager pay in the model: market power and firm size. Both increase the profitability of the firm, which makes managers more valuable as it increases their marginal product. Using data on executive compensation from Compustat, we quantitatively analyze how market power affects Manager Pay and how it changes over time. We attribute on average 45.8% of Manager Pay to market power, from 38.0% in 1994 to 48.8% in 2019. Over this period, market power accounts for 57.8% of growth. We also find there is a lot of heterogeneity within the distribution of managers. For the top managers, 80.3% of their pay in 2019 is due to market power. Top managers are hired disproportionately by firms with market power, and they get rewarded for it, increasingly so. |
| Keywords: | market power, manager pay, executive compensation, markups, reallocation, superstars |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1834&r= |
| By: | Boris Hirsch (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre); Philipp Lentge (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre); Claus Schnabel (Friedrich-Alexander-Universität Erlangen-Nürnberg) |
| Abstract: | In Germany, employers used to pay union members and non-members in a plant the same union wage in order to prevent workers from joining unions. Using recent administrative data, we investigate which workers in firms covered by collective bargaining agreements still individually benefit from these union agreements, which workers are not covered anymore, and what this means for their wages. We show that about 9 percent of workers in plants with collective agreements do not enjoy individual coverage (and thus the union wage) anymore. Econometric analyses with unconditional quantile regressions and firm-fixed-effects estimations demonstrate that not being individually covered by a collective agreement has serious wage implications for most workers. Low-wage non-union workers and those at low hierarchy levels particularly suffer since employers abstain from extending union wages to them in order to pay lower wages. This jeopardizes unions’ goal of protecting all disadvantaged workers. |
| Keywords: | collective bargaining, union wage, uncovered workers, Germany |
| JEL: | J31 J53 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:408&r= |
| By: | Shai Bernstein; Kunal Mehta; Richard R. Townsend; Ting Xu |
| Abstract: | We analyze a field experiment conducted on AngelList Talent, a large online search platform for startup jobs. In the experiment, AngelList randomly informed job seekers of whether a startup was funded by a top-tier investor and/or was funded recently. We find that the same startup receives significantly more interest when information about top-tier investors is provided. Information about recent funding has no effect. The effect of top-tier investors is not driven by low-quality candidates and is stronger for earlier-stage startups. The results show that venture capitalists can add value passively, simply by attaching their names to startups. |
| JEL: | C93 G24 J22 J24 L26 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29847&r= |
| By: | Dan Honig (University College London) |
| Abstract: | People management has an important role to play in improving public agency performance. This paper argues that a ‘Route Y’ managerial approach focused on supporting the empowered exercise of employee judgment will in many circumstances prove superior to conventional reform approaches steeped in ‘Route X’ monitoring and incentives. Returns to Route Y are greater when employees are or can become more “mission motivated” – that is, aligned with the goals of the agency in the absence of monitoring and extrinsic incentives. Returns to Route Y are also greater when monitoring is incomplete or otherwise likely to unproductively distort effort, thus lowering the returns to using performance-linked rewards and penalties. I argue that education systems are one (but far from the only) setting where Route Y is a lever worth focusing on in efforts to improve public performance in the developed and developing world alike. |
| Keywords: | people management, public policy |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:409&r= |
| By: | Cheryl Carleton (Department of Economics, Villanova School of Business, Villanova University); Mary T. Kelly (Department of Economics, Villanova School of Business, Villanova University) |
| Abstract: | With the growing attachment of older workers to the labor force and their engagement in alternative work arrangements, it is important to investigate the characteristics of older cohorts of individuals who are in the labor market and the factors that influence job satisfaction, as job satisfaction may be a predictor of which older individuals are likely to continue to work and in what type of work arrangement. This study uses several recent years of the General Social Survey to both explore the characteristics of older workers and investigate what contributes to job satisfaction, controlling for both gender and work arrangement. It splits the sample of workers into two cohorts to test for differences in job satisfaction between those who are nearing retirement age (55-64) and those who continue to work post the traditional retirement age (65-80). For the sample as a whole, and similar to other studies, we find that job satisfaction is higher for women and for those who work in alternative work arrangements as compared to those in regular jobs. We also find that there are differences in what contributes to job satisfaction between the two groups of older workers. These outcomes may inform firms about what they might do in order to keep these workers as well as informing the government on whether it is necessary to rethink how some benefits are both provided and paid for. |
| Keywords: | Job satisfaction; Alternative Work Arrangements; Older workers |
| JEL: | J28 J16 J48 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:vil:papers:51&r= |
| By: | Emiliano Catonini; Sergey Stepanov |
| Abstract: | When is transparency optimal in principal-agent relationships? We consider the following setting. The principal has private, payoff-relevant information about the potential of the project. She can share this information with the agent and can commit to any information structure. Positive news motivate the agent, while bad news depress effort. Under rather mild and natural restrictions on the utility functions of the parties, we obtain interpretable and easily verifiable sufficient conditions for the optimality of full disclosure. We also show that full disclosure is optimal under some modeling assumptions commonly used in applied principal-agent papers. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.07944&r= |
| By: | Sivropoulos-Valero, Anna Valero |
| Abstract: | The empirical management literature has found that the education of both managers and the workforce more generally appears to be an important driver of better management practices. This article sets out how such relationships might be conceptualised, and suggests that in a complementarities framework, modern management practices can be thought of as a type of skill-biased technology. It then summarises the literature that has explored the relationships between human capital and surveyed management practices in manufacturing firms and other sectors, highlighting the handful of papers that have found a positive correlation between management practices and measures of local skills supply. It concludes with a discussion of the policy implications that stem from what we know so far, together with avenues for future research that could shed more light on the causal mechanisms at play. |
| Keywords: | management practices; education; human capital |
| JEL: | I23 J24 L20 L60 M20 |
| Date: | 2021–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:114436&r= |