nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒01‒09
thirteen papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. The Gender Pay Gap in the CEOs' Labor Market By Tani, Massimiliano; Valentine, Andrew; Sharpe, Kieran
  2. Does Pay Inequality Affect Worker Effort? An Assessment of Existing Laboratory Designs By Marco Fongoni
  3. Performance-related Pay and the UK Gender Pay Gap By Jones, Melanie; Kaya, Ezgi
  4. Working from Home and Employee Perception of Career Prospects in Europe: the Gender and Family Perspectives By Agnieszka Kasperska
  5. Procedural preferences for autonomy: an experimental study with Colombian workers By Prada-Medina, Laura; Mantilla, Cesar; Cortes, Darwin
  6. Choice over Payment Schemes and Worker Effort By Abel, Martin; Burger, Rulof
  7. Preferences, Inequities, and Incentives in the Substitute Teacher Labor Market By Matthew A. Kraft; Megan Lane Conklin; Grace T. Falken
  8. Keep Calm and Carry On: The Short- vs. Long-Run Effects of Mindfulness Meditation on (Academic) Performance By Lea Cassar; Mira Fischer; Vanessa Valero
  9. The Anatomy of Sorting - Evidence from Danish Data By Rasmus Lentz; Suphanit Piyapromdee; Jean-Marc Robin
  10. The gender gap in top jobs – the role of overconfidence By Anna Adamecz-Völgyi; Nikki Shure
  11. High-Pressure, High-Paying Jobs? By Markus Nagler; Johannes Rincke; Erwin Winkler
  12. Robust Contracts with Exploration By Chang Liu
  13. Firing costs and productivity: Evidence from a natural experiment By Andrea Caggese; Ozan Guler; Mike Mariathasan; Klaas Mulier

  1. By: Tani, Massimiliano (University of New South Wales); Valentine, Andrew (UNSW Sydney); Sharpe, Kieran
    Abstract: We study the gender pay gap in the labor market for CEOs by analysing 1,174 outsider CEO successions over the past three decades across 18 countries. We find that male and female CEOs receive a similar compensation overall but this masks marked gender differences in the pay structure: namely, women CEOs receive a lower proportion of fixed to total compensation than comparable men. We interpret this outcome as the result of gendered risk preferences, which exacerbate the pay gap when there is bargaining over pay, and contribute a theoretical model of the CEO labor market to formalise this intuition. The model also suggests that a more balanced gender composition in companies' boards can help women close the gap in pay structure—an hypothesis that is empirically supported in our data.
    Keywords: CEO compensation, women CEOs, board diversity, corporate governance
    JEL: J16 J31 G39 M59
    Date: 2022–12
  2. By: Marco Fongoni (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper develops a theoretical framework to think about employees' effort choices, and applies this framework to assess the ability of existing laboratory designs to identify the effect of pay inequality on worker effort. The analysis shows that failure to control for a number of confounds-such as reciprocity towards the employer in multilateral gift-exchange games (vertical fairness), or the incentive to increase effort when feeling underpaid under piece rates (income targeting)-may lead to inaccurate interpretation of evidence of treatment effects. In light of these findings, the paper provides a set of recommendations on how to improve identification in the design of laboratory experiments in the future.
    Keywords: pay inequality, effort, laboratory experiments, reference dependence, fairness
    Date: 2022–11
  3. By: Jones, Melanie; Kaya, Ezgi
    Abstract: This paper explores the role of performance-related pay to the UK gender pay gap at the mean and across the earnings distribution. Applying decomposition methods to data from the Annual Survey of Hours and Earnings, we find that performance-related pay is an important but neglected factor, with the lower probability of females being employed in performance-related pay jobs explaining 12 per cent of the observed mean gender pay gap and making a larger contribution than many work-related characteristics routinely included in studies of this nature. Driven by its influence in the private sector, employment in performance-related pay jobs is more important in explaining the gender pay gap at the top end of the wage distribution, consistent with gender differences in receipt of bonus payments. Gender differences in the reward to performance-related pay jobs have a further, but more modest, role in widening the national and private sector mean gender pay gap.
    Keywords: gender pay gap, performance-related pay, earnings distribution, sector
    JEL: J31 J33 J45 J71
    Date: 2022
  4. By: Agnieszka Kasperska (University of Warsaw, Faculty of Economic Science)
    Abstract: This article examines the relationship between work from home and perceived career prospects for employees from 29 European countries, considering gender and family perspectives. The indicators of career prospects pertain to advancement prospects, job visibility, and rapport with a supervisor and colleagues. Multilevel modelling was applied to the cross-sectional data of the European Working Conditions Survey which was merged with the country-level Family Policies Sub-Index to grasp the potential moderating effect of national contexts. The findings indicate positive relationships between work from home and career prospects for men both fathers and non-fathers, and rather negative relationships for women, especially for mothers. Higher provision of work-family reconciliation measures and the prevalence of work from home are associated with better career prospects reported by both men and women. Varying relationships for different work from home frequencies are observed, with workers who work from home less frequently reporting better career prospects.
    Keywords: career prospects, family, gender, promotion, remote work, working from home
    JEL: J16
    Date: 2022
  5. By: Prada-Medina, Laura; Mantilla, Cesar; Cortes, Darwin
    Abstract: We document how the procedure of allocating barely identical tasks among team members affects productivity and the willingness to pay for repeating the job alone rather than in teams. We find a complementarity relation between the assignment procedure (by-choice, imposed by a third party with a higher hierarchy, or random) and the preferences about the task to perform. For participants in the Imposed mechanism, being assigned to a preferred task increases performance, while being imposed on a non-preferred task negatively affects performance. Moreover, we find that the participants who were more interested in paying for autonomy were those randomly assigned to be autonomous (by-choice) at the beginning of the experiment. Hence, these results suggest that people care about factors beyond payoffs, such as autonomy. Among self-employed workers, the effect on the productivity of being imposed on a non-preferred task is exacerbated, and we did not find any statistical impact on the willingness to pay for playing alone.
    Date: 2022–11–29
  6. By: Abel, Martin (Bowdoin College); Burger, Rulof (Stellenbosch University)
    Abstract: We study the effect of monetary incentives on effort in a prosocial task: writing letters encouraging voter turnout. Volunteers are randomized to receive no incentive, unconditional upfront payment, payment conditional on completing the task, or to have a choice between the two payment schemes. The unconditional and conditional payment both increase task completion rates by about 18 percentage points (43%). Giving people a choice between the payment scheme doubles the effect on task completion (35 p.p., 84%). Unlike unconditional payments, a choice over contracts also increases time spent on the task and letter quality. Survey responses suggest that giving people a choice is effective because it increases task ownership rather than the desire to return a favor or avoid feelings of guilt.
    Keywords: self determination, gift exchange, guilt aversion, labor supply
    JEL: D86 D91 J22
    Date: 2022–12
  7. By: Matthew A. Kraft; Megan Lane Conklin; Grace T. Falken
    Abstract: We examine the labor supply decisions of substitute teachers – a large, on-demand market with broad shortages and inequitable supply. In 2018, Chicago Public Schools implemented a targeted bonus program designed to reduce unfilled teacher absences in largely segregated Black schools with historically low substitute coverage rates. Using a regression discontinuity design, we find that incentive pay substantially improved coverage equity and raised student achievement. Changes in labor supply were concentrated among Black and Hispanic substitutes from nearby neighborhoods with experience in incentive schools. Wage elasticity estimates suggest incentives would need to be 50% of daily wages to close fill-rate gaps.
    JEL: I21 I24 J23 J33
    Date: 2022–12
  8. By: Lea Cassar; Mira Fischer; Vanessa Valero
    Abstract: Mindfulness-based meditation practices are becoming increasingly popular in Western societies, including in the business world and in education. While the scientific literature has largely documented the benefits of mindfulness meditation for mental health, little is still known about potential spillovers of these practices on other important life outcomes, such as performance. We address this question through a field experiment in an educational setting. We study the causal impact of mindfulness meditation on academic performance through a randomized evaluation of a well-known 8-week mindfulness meditation training delivered to university students on campus. As expected, the intervention improves students' mental health and non-cognitive skills. However, it takes time before students' performance can benefit from mindfulness meditation: we find that, if anything, the intervention marginally decreases average grades in the short run, i.e., during the exam period right after the end of the intervention, whereas it significantly increases academic performance, by about 0.4 standard deviations, in the long run (ca. 6 months after the end of intervention). We investigate the underlying mechanisms and discuss the implications of our results.
    Keywords: performance, mental health, education, meditation, field experiment
    JEL: I21 C93 I12 I31
    Date: 2022
  9. By: Rasmus Lentz (University of Wisconsin-Madison); Suphanit Piyapromdee (UCL - University College of London [London]); Jean-Marc Robin (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, UCL - University College of London [London])
    Abstract: In this paper, we formulate and estimate a flexible model of job mobility and wages with two-sided heterogeneity. The analysis extends the finite mixture approach of Bonhomme et al. (2019) and Abowd et al. (2019) to develop a new Classification Expectation-Maximization algorithm that ensures both worker and firm latent type identification uses wage and mobility variations in the data. Workers receive job offers in worker type segmented labor markets. Offers are accepted according to a logit form that compares the value of the current job with that of the new job. In combination with flexibly estimated layoff and job finding rates, the analysis quantifies the four different sources of sorting: preferences (job values), segmentation, layoffs, and job finding. Job preferences are identified through jobto-job moves in a revealed preference argument. They are in the model structurally independent from the identified job wages, possibly as a reflection of the presence of amenities. We find evidence of a strong pecuniary motive in job preferences. While, the correlation between preferences and current job wages is positive, the net present value of the future earnings stream given the current job correlates much more strongly with preferences for it. This is more so for short than long tenure workers. In the analysis, we distinguish between type sorting and wage sorting. Type sorting is quantified by means of the mutual information index. Wage sorting is captured through correlation between identified wage types. While layoffs are less important than the other channels, we find all channels to contribute substantially to sorting. In early career, job arrival processes are the key determinant of both types of sorting, whereas the role of job preferences becomes increasingly important as cohorts age. Over the life cycle, job preferences intensify, type sorting increases and pecuniary considerations wane.
    Keywords: Heterogeneity, Wage distributions, Employment and job mobility, Mutual information, Finite mixtures, EM algorithm, Classification algorithm, Sorting, Decomposition of wage inequality
    Date: 2022–10–11
  10. By: Anna Adamecz-Völgyi (Centre for Economic and Regional Studies, UCL Social Research Institute, University College London); Nikki Shure (UCL Social Research Institute, University College London, Institute of Labor Economics (IZA))
    Abstract: There is a large gender gap in the probability of being in a “top job” in mid-career. Top jobs bring higher earnings, and also have more job security and better career trajectories. Recent literature has raised the possibility that some of this gap may be attributable to women not “leaning in” while men are more overconfident in their abilities. We use longitudinal data from childhood into mid-career and construct a measure of overconfidence using multiple measures of objective cognitive ability and subjective estimated ability. Our measure confirms previous findings that men are more overconfident than women. We then use linear regression and decomposition techniques to account for the gender gap in top jobs including our measure of overconfidence. Our results show that men being more overconfident explains 5-11 percent of the gender gap in top job employment. This indicates that while overconfidence matters for gender inequality in the labor market and has implications for how firms recruit and promote workers, other individual, structural, and societal factors play a larger role.
    Keywords: gender gaps, inequality, overconfidence, labor market
    JEL: I24 I26 J24
    Date: 2022–10
  11. By: Markus Nagler; Johannes Rincke; Erwin Winkler
    Abstract: Work-related stress has reportedly increased over time. Using worker-level survey data, we build a measure of work pressure strongly associated with adverse health outcomes. In line with theories of compensating differentials, work pressure comes with a sizable earnings premium, even within narrowly defined occupations. As expected, we find no premium among civil servants who face strong labor market frictions. In complementary stated-choice experiments, we uncover a substantial willingness-to-pay to avoid work pressure. Our evidence is consistent with workers sorting into high- and low-pressure jobs. Differences in the prevalence and valuation of work pressure explain a substantial share of wage inequality.
    Keywords: work pressure, compensating differentials, working conditions, wage inequality, health
    JEL: I10 I31 J20 J31 J32 J81 M52
    Date: 2022
  12. By: Chang Liu
    Abstract: We study a two-period moral hazard problem; there are two agents, with identical action sets that are unknown to the principal. The principal contracts with each agent sequentially, and seeks to maximize the worst-case discounted sum of payoffs, where the worst case is over the possible action sets. The principal observes the action chosen by the first agent, and then offers a new contract to the second agent based on this knowledge, thus having the opportunity to explore in the first period. We characterize the principal's optimal payoff guarantee. Following nonlinear first-period contracts, optimal second-period contracts may also be nonlinear in some cases. Nonetheless, we find that linear contracts are optimal in both periods.
    Date: 2022–11
  13. By: Andrea Caggese; Ozan Guler; Mike Mariathasan; Klaas Mulier
    Abstract: This paper investigates the effect of firing costs on total factor productivity (TFP) and resource allocation. Exploiting heterogeneous changes in firing costs across employee types in Belgium, we find that increasing firing costs reduce firm-level TFP. Firms facing a net increase in firing costs reduce hiring and firing, increase hours worked per employee, adjust the composition of their workforce away from employee types whose firing costs have increased, and rely more on outsourced employees. Instead, we find no evidence of capital-intensive technology adoption. The decline in TFP is smaller for firms with better access to credit.
    Keywords: Firing costs, employment protection, productivity, misallocation
    JEL: E22 E23 E24
    Date: 2022–11

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