nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2022‒05‒30
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Accounting for firms in ethnicity wage gaps throughout the earnings distribution By Van Phan; Carl Singleton; Alex Bryson; John Forth; Felix Ritchie; Lucy Stokes; Damian Whittard
  2. Should Individuals Choose Their Own Incentives? Evidence from a Mindfulness Meditation Intervention By Andrej Woerner; Giorgia Romagnoli; Birgit M. Probst; Nina Bartmann; Jonathan N. Cloughesy; Jan Willem Lindemans
  3. Do Management Practices Matter in Further Education? By Sandra McNally; Luis Schmidt; Anna Valero
  4. Market Power & Within-Firm Inequality By Kazakis, Pantelis
  5. Job Satisfaction and Training Investments By Cosima Obst
  6. How Middle-Skilled Workers Adjust to Immigration: The Role of Occupational Skill Specificity By Damiano Pregaldini; Uschi Backes-Gellner
  7. What Do Employee Referral Programs Do? Measuring the Direct and Overall Effects of a Management Practice By Guido Friebel; Matthias Heinz; Mitchell Hoffman; Nick Zubanov
  8. Individual characteristics associated with risk and time preferences: A multi country representative survey By Thomas Meissner; Xavier Gassmann; Corinne Faure; Joachim Schleich
  9. Corporate Social Responsibility along the Global Value Chain By Philipp Herkenhoff; Sebastian Krautheim; Finn Ole Semrau; Frauke Steglich

  1. By: Van Phan; Carl Singleton; Alex Bryson; John Forth; Felix Ritchie; Lucy Stokes; Damian Whittard
    Abstract: Ethnicity wage gaps in Great Britain are large and have persisted over time. Previous studies of these gaps have been almost exclusively confined to analyses of household data, so they could not account for the role played by individual employers, despite growing evidence of their wage-setting power. We study ethnicity wage gaps using high quality employer-employee payroll data on jobs, hours, and earnings, linked with the personal and family characteristics of workers from the national census for England and Wales. We show that firm-specific wage effects account for sizeable parts of the estimated differences between the wages of white and ethnic minority workers at the mean and other points in the wage distribution, which would otherwise mostly have been attributed to differences in individual worker attributes, such as education levels, occupations, and locations. Nevertheless, there are substantial gaps between the wage structures of white and ethnic minority employees which cannot be accounted for by who people work for or other attributes, especially among higher earners.
    Keywords: Employer-Employee Data, Unconditional Quantile Regression, Decomposition Methods, UK Labour Market
    JEL: J31 J7 J71
    Date: 2022–05–01
  2. By: Andrej Woerner; Giorgia Romagnoli; Birgit M. Probst; Nina Bartmann; Jonathan N. Cloughesy; Jan Willem Lindemans
    Abstract: This paper theoretically and empirically investigates the effects of letting people choose from a menu of increasingly challenging incentive schemes. We derive the conditions under which a policy maker profits from leaving the choice to the individuals by leveraging their private information about the expected benefits from the targeted behavior. We test the theoretical predictions in a field experiment in which we pay participants monetary rewards for completing daily meditation sessions. We randomly assign some participants to one of two incentive schemes and allow others to choose between the two schemes. As predicted, participants sort into schemes in (partial) agreement with the objectives of the policy maker. In contrast to our theoretical predictions, participants who could choose complete significantly fewer meditation sessions than participants that were randomly assigned. Since the results are not driven by poor selection, we infer that letting people choose between incentive schemes may bring in psychological effects that discourage adherence.
    Keywords: monetary incentives, dynamic incentives, field experiment, mental health
    JEL: C90 D03 D80 I10
    Date: 2021
  3. By: Sandra McNally; Luis Schmidt; Anna Valero
    Abstract: Further Education colleges are a key way in which 16-19 year olds acquire skills in the UK (much like US Community Colleges), especially those from low income backgrounds. Yet, little is known about what could improve performance in these institutions. We design and conduct the world’s first management practices survey in these colleges (based on the World Management Survey) and match this to administrative longitudinal data on over 40,000 students. Value added regressions with rich controls suggest that structured management matters for educational outcomes (e.g. upper secondary qualifications), especially for students from low-income backgrounds. In a hypothetical scenario where a learner is moved from a college at the 10th percentile of management practices to the 90th, this would be associated with 8% higher probability of achieving a good high school qualification, which is nearly half of the educational gap between those from poor and non-poor backgrounds. Hence, improving management practices may be an important channel for reducing inequalities.
    Keywords: management practices, further education
    JEL: I20 J24
    Date: 2022
  4. By: Kazakis, Pantelis
    Abstract: Income inequality in the United States is on the rise. At the same time, firm market power has also increased. In this paper, I attempt to shed light on the relation between these two variables. Using data for U.S. firms I find a positive relation between market power and top executive pay. I also find that market power is positively associated with executive wage-to-employee wage ratios, potentially indicating that market power is a force that increases within-firm inequality
    Keywords: within-firm inequality, CEO & executive pay, firm markups, competition
    JEL: J2 J31 J33 L1
    Date: 2022–04–21
  5. By: Cosima Obst (University of Potsdam)
    Abstract: Job satisfaction has been found to impact behavioral choices at the workplace. Since levels of satisfaction are not guaranteed to remain high, understanding the consequences of job dissatisfaction is essential. Hence, I analyze the relationship between a worker’s job satisfaction and her training investments. Based on my theoretical model, I expect a U-shaped relationship if dissatisfied workers attempt to improve the situation or plan to quit. In contrast, there is an overall positive relationship if dissatisfied workers neglect their duties. Using logit regressions with the Household, Income and Labour Dynamics in Australia (HILDA) survey I find tentative evidence that there is on average an overall positive relationship with a 1 standard deviation increase in job satisfaction being associated with a 1.5% increased likelihood of participating in training. A closer inspection of the reasons for training as well as quit intentions reveals some hints of a U-shaped relationship. My results highlight the importance of considering the source of dissatisfaction as there are heterogeneous effects along different job satisfaction facets.
    Keywords: Human Capital Investment, Work-related Training, Job Satisfaction
    JEL: J24 J28 C23
    Date: 2022–05
  6. By: Damiano Pregaldini; Uschi Backes-Gellner
    Abstract: We investigate how the adjustment of middle-skilled workers to immigration depends on the specificity of their occupational skill bundles. We combine the 2002 opening of the Swiss labor market to EU workers with register data on the location and occupation of these workers. In comparison to previous studies, we find counterintuitive results: the sudden inflow of EU workers increased the employment of native middle-skilled workers with specific occupational skills and, at the same time, reduced their occupational mobility. These results can be explained by the inflow of EU workers reducing existing skill gaps and alleviating firms' capacity restrictions, thereby improving job-worker matches and reducing the need for occupational changes of native workers.
    Keywords: migration, cross-border workers, occupational skill specificity
    JEL: J15 J24 J62
    Date: 2021–12
  7. By: Guido Friebel (Goethe University of Frankfurt, CEPR and IZA); Matthias Heinz (University of Cologne and CEPR); Mitchell Hoffman (University of Toronto Rotman School of Management and NBER); Nick Zubanov (University of Konstanz and IZA)
    Abstract: Employee referral programs (ERPs) are randomly introduced in a grocery chain. On direct effects, larger referral bonuses increase referral quantity but decrease quality, though the increase in referrals from ERPs is modest. However, the overall effect of having an ERP is substantial, reducing attrition by 15% and significantly decreasing labor costs. This occurs, partly, because referrals stay longer than non-referrals, but, mainly, from indirect effects: non-referrals stay longer in treated than in control stores. The most-supported mechanism for these indirect effects is workers value being involved in hiring. Attrition impacts are larger in higher-performing stores and better local labor markets.
    Keywords: Management practices; organizational economics; hiring; respect
    JEL: M51 M52 D23
    Date: 2022–05
  8. By: Thomas Meissner; Xavier Gassmann; Corinne Faure; Joachim Schleich
    Abstract: This paper empirically analyzes how individual characteristics are associated with risk aversion, loss aversion, time discounting, and present bias. To this end, we conduct a large-scale demographically representative survey across eight European countries. We elicit preferences using incentivized multiple price lists and jointly estimate preference parameters to account for their structural dependencies. Our findings suggest that preferences are linked to a variety of individual characteristics such as age, gender, and income as well as some personal values. We also report evidence on the relationship between cognitive ability and preferences. Incentivization, stake size, and the order of presentation of binary choices matter, underlining the importance of controlling for these factors when eliciting economic preferences.
    Date: 2022–04
  9. By: Philipp Herkenhoff; Sebastian Krautheim; Finn Ole Semrau; Frauke Steglich
    Abstract: Firms are under increasing pressure to meet stakeholders’ demand for Corporate Social Responsibility (CSR) along their global value chains. We study the incentives for and investments in CSR at different stages of the production process. We analyze a model of sequential production with incomplete contracts where CSR by independent suppliers differentiates the final product in the eyes of caring consumers. The model predicts an increasing CSR profile for suppliers along the value chain: from upstream suppliers with low CSR to downstream suppliers with higher CSR. We confirm this prediction using Indian firm-level data. We compute a firm’s value chain position combining product-level information in our data with the World Input-Output Database. We find that more downstream firms have higher CSR expenditures as measured by a combination of staff welfare spending and social community spending.
    Keywords: corporate social responsibility, global value chains, incomplete contracts, property rights theory, GVC positioning, India, emerging markets
    JEL: D23 F12 F14 F18 F61 F63 L23 M14 O12
    Date: 2021

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