nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2022‒06‒13
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Accounting for Firms in Ethnicity Wage Gaps throughout the Earnings Distribution By Phan, Van; Singleton, Carl; Bryson, Alex; Forth, John; Ritchie, Felix; Stokes, Lucy; Whittard, Damian
  2. Gender Bias in Perceived Quality. An Experiment with Elite Soccer Performance By Carlos Gomez-Gonzalez; Helmut Dietl; David Berri; Cornel Nesseler
  3. How Do Reward Versus Penalty Framed Incentives Affect Diagnostic Performance in Auditing? By Bright (Yue) Hong; Timothy W. Shields
  4. Skill Mismatch and the Costs of Job Displacement By Frank Neffke; Ljubica Nedelkoska; Simon Wiederhold
  5. Training, Productivity and Wages: Direct Evidence from a Temporary Help Agency By Dong, Xinwei; Hyslop, Dean; Kawaguchi, Daiji
  6. Gender Gaps in Early Wage Expectations By Leibing, Andreas; Peter, Frauke; Waights, Sevrin; Spieß, C. Katharina
  7. Peers Affect Personality Development By Xiaoque Shan; Ulf Zölitz
  8. Informal Incentives and Labor Markets By Matthias Fahn; Takeshi Murooka

  1. By: Phan, Van (University of the West of England, Bristol); Singleton, Carl (University of Reading); Bryson, Alex (University College London); Forth, John (Cass Business School); Ritchie, Felix (University of the West of England, Bristol); Stokes, Lucy (National Institute of Economic and Social Research (NIESR)); Whittard, Damian (University of the West of England, Bristol)
    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: decomposition methods, unconditional quantile regression, employer-employee data, UK labour market
    JEL: J31 J7 J71
    Date: 2022–05
  2. By: Carlos Gomez-Gonzalez (Department of Business Administration, University of Zurich); Helmut Dietl (Department of Business Administration, University of Zurich); David Berri (Southern Utah University, Cedar City, UT, USA); Cornel Nesseler (Department of Business Administration, University of Zurich)
    Abstract: Whether one looks at revenue, investment, or coverage, men’s sports do better than women’s. Many assume that the differences are driven by absolute differences in quality of athletic performance. However, the existence of stereotypes should alert us to another possibility: What if perceived quality is filtered through gender stereotypes? We perform an experiment showing participants video clips of elite female and male soccer players. In the control group, participants evaluated normal videos where the gender of the players was clear to see. In the treatment group, participants evaluated the same videos but with gender obscured by blurring. We find that participants only rated men’s videos higher when they knew they were watching men. When they didn’t know who they were watching, ratings for female and male athletes did not differ significantly. The findings are consistent with the interpretation that gender bias plays a role in the evaluation of athletic performance. Implications for research and the sports industry are discussed.
    Keywords: experiment; evaluation; gender bias; fans; soccer; women’s sport
    JEL: D70 J16 C90
    Date: 2022–05
  3. By: Bright (Yue) Hong (School of Accountancy & MIS, Driehaus College of Business, DePaul University); Timothy W. Shields (Argyros School of Business and Management, Economic Science Institute, Chapman University)
    Abstract: Prior research examines how rewards versus economically equivalent penalties affect effort. However, accountants perform various diagnostic analyses that involve more than exerting effort. For example, auditors often need to identify whether a material misstatement is the underlying cause of a phenomenon among the possible causes. Testing helps identify the cause, but testing is costly. When participants are incentivized to test accurately (rather than test more) and objectively (unbiased between testing and not testing), we find that framing the incentives as rewards versus equivalent penalties increases testing by lowering the subjective testing criterion and by increasing the assessed risk of material misstatement. However, testing increases primarily when a misstatement is absent, causing more false alarms under a reward frame with no improvement in misstatement detection. Penalties are pervasive in auditing. Our study suggests that rewards are more effective for increasing testing, and that increasing testing blindly can impair audit efficiency.
    Keywords: Frame, rewards, penalties, objectivity, accuracy, judgment, diagnostic tasks, experiment, auditing
    JEL: C92 D82 D81 M40
    Date: 2022
  4. By: Frank Neffke; Ljubica Nedelkoska; Simon Wiederhold
    Abstract: When workers are displaced from their jobs in mass layoffs or firm closures, they experience lasting adverse labor market consequences. We study how these consequences vary with the amount of skill mismatch that workers experience when returning to the labor market. Using novel measures of skill redundancy and skill shortage, we analyze individuals' work histories in Germany between 1975 and 2010. We estimate difference-in-differences models, using a sample in which we match displaced workers to statistically similar non-displaced workers. We find that displacements increase the probability of occupational change eleven fold, and that the type of skill mismatch after displacement is strongly associated with the magnitude of post-displacement earnings losses. Whereas skill shortages are associated with relatively quick returns to the counterfactual earnings trajectories that displaced workers would have experienced absent displacement, skill redundancy sets displaced workers on paths with permanently lower earnings.
    Date: 2022
  5. By: Dong, Xinwei (University of Tokyo); Hyslop, Dean (Motu Economic and Public Policy Research Trust); Kawaguchi, Daiji (University of Tokyo)
    Abstract: Firms frequently provide general skill training to workers at the firm's cost. Theories proposed that labor market frictions entails wage compression, larger productivity gain than wage growth to skill acquisition, and motivates a firm to offer opportunities for skill acquisition, but few studies directly test the hypothesis. We use unusually rich data from a temporary help service firm that records both workers' wages and their productivity as measured by the fees charged to client firms. We first document that the firm provides upfront training, and show that both workers' tenure and the initial fee charged to clients are positively related to the length of training, but the initial wage paid to workers is not. We then demonstrate that the fees charged to clients grow faster over workers' tenure than the wages paid to workers. Finally, we find that about one-quarter of the fee growth is associated with client quality upgrading, but that workers receive none of this growth. Each of these results are consistent with wage compression that skills acquired through training and learning-by-doing increases productivity more than wages.
    Keywords: training, general skill, temporary help service agency, productivity, wages
    JEL: J24 J42
    Date: 2022–05
  6. By: Leibing, Andreas (DIW Berlin); Peter, Frauke (DZHW-German Centre for Research on Higher Education and Science Studies); Waights, Sevrin (DIW Berlin); Spieß, C. Katharina (Bundesinstitut für Bevölkerungsforschung (BiB))
    Abstract: Using detailed data from a unique survey of high school graduates in Germany, we document a gender gap in expected full-time earnings of more than 15%. We apply a regression-compatible Oaxaca-Blinder decomposition and find that especially differences in coefficients help explain the gap. In particular, the effects of having time for family as career motive and being first-generation college student are associated with large penalties in female wage expectations exclusively. This is especially true for higher expected career paths. Resulting expected returns to education are associated with college enrollment of women and could thus entrench subsequent gaps in realized earnings.
    Keywords: wage expectations, gender gap, college enrollment
    JEL: I26 J31 D84
    Date: 2022–05
  7. By: Xiaoque Shan; Ulf Zölitz
    Abstract: Do the people around us influence our personality? To answer this question, we conduct an experiment with 543 university students who we randomly assign to study groups. Our results show that students become more similar to their peers along several dimensions. Students with more competitive peers become more competitive, students with more open-minded peers become more open-minded, and students with more conscientious peers become more conscientious. We see no significant effects of peers’ extraversion, agreeableness, or neuroticism. To explain these results, we propose a simple model of personality development under the influence of peers. Consistent with the model’s prediction, personality spillovers are concentrated in traits predictive of performance. Students adopt personality traits that are productive in the university context from their peers. Our findings highlight that socialization with peers can influence personality development.
    Keywords: personality, malleability, peer effects, experiment
    JEL: I21 I24 J24
    Date: 2022
  8. By: Matthias Fahn; Takeshi Murooka
    Abstract: This paper theoretically investigates how labor-market tightness affects market outcomes if firms use informal and self-enforcing agreements to motivate workers. We characterize profit-maximizing equilibria and derive the following results. First, an increase in the supply of homogenous workers can increase wages. Second, even though all workers are identical in terms of skills or productivity, a discrimination equilibrium exists in which a group of majority workers are paid higher wages than a group of minority workers. Third, minimum wages can reduce such discrimination and increase employment. We discuss how these results are consistent with empirical evidence on immigration and a gender pay gap, and provide new testable implications.
    Keywords: informal incentives, labor supply, immigration, wage discrimination, minimum wage
    JEL: D21 D86 J21 J38 J61 J71
    Date: 2022

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