nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒02‒13
eleven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Acquisitions, management and efficiency in Rwanda's coffee industry By Macchiavello, Rocco; Morjaria, Ameet
  2. When are wages cut? The roles of incomplete contracts and employee involvement By Marco Fongoni; Daniel Schaefer; Carl Singleton
  3. Betting on Diversity – Occupational Segregation and Gender Stereotypes By Urs Fischbacher; Dorothea Kübler; Robert Stüber
  4. Turning worries into cognitive performance: Results from an online experiment during Covid By Timothée Demont; Daniela Horta Sáenz; Eva Raiber
  5. Retrieving the Returns to Experience, Tenure, and Job Mobility from Work Histories By Pedro Portugal; John T. Addison; Pedro Raposo
  6. Perceived Fairness and Consequences of Affirmative Action Policies By Hannah Schildberg-Hörisch; Marco A. Schwarz; Chi Trieu; Jana Willrodt; Marco Alexander Schwarz
  7. Management and misallocation in Mexico By Bloom, Nicholas; Iacovone, Leonardo; Pereira-López, Mariana; Van Reenen, John
  8. Human Capital Spillovers and Returns to Education By Hugo Reis; Paulo Guimarães; Pedro Portugal; Ana Rute Cardoso
  9. Company wage policy in a low-wage labor market By Giupponi, Giulia; Machin, Stephen
  10. Managerial input and firm performance. Evidence from a policy experiment By Manaresi, Francesco; Palma, Alessandro; Salvatici, Luca; Scrutinio, Vincenzo
  11. Is There a Union Wage Premium in Germany and Which Workers Benefit Most? By Bonaccolto-Töpfer, Marina; Schnabel, Claus

  1. By: Macchiavello, Rocco; Morjaria, Ameet
    Abstract: Well-functioning markets allocate assets to owners that improve firms' management and performance. We study the effects of ownership changes on coffee mills in Rwanda - an industry in which managing relationships with farmers and seasonal workers is important and that has seen many ownership changes in recent years. We combine administrative data, a survey panel of mills and an original survey of acquirers that allows us to construct acquirer-specific and target-specific control groups. A difference-in-differences design reveals that ownership changes do not improve performance unless the mill is acquired by a foreign firm. Our preferred interpretation - supported by detailed survey evidence that considers alternative hypotheses - is that foreign firms successfully implement management changes in key operational areas. Upon acquisition, both domestic and foreign owned mills attempt to implement similar changes, but domestic firms face resistance from workers and farmers. Domestic owners have relationships with their local communities, which can create opportunities to establish new mills and acquire existing ones. However, these same relationships create pressure to maintain status-quo relational arrangements, which makes it harder to implement managerial changes.
    Keywords: management; performance; market reforms; coffee; Rwanda
    JEL: D24 O12 O16 G32 G34 L25 N57
    Date: 2022–07–21
  2. By: Marco Fongoni (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.); Daniel Schaefer (Department of Economics, Johannes Kepler University Linz, Austria); Carl Singleton (Department of Economics, University of Reading, Whiteknights, UK)
    Abstract: We develop a model of incomplete employment contracts such that employees have some discretion over effort, which depends on their work morale. Nominal wage cuts have a strong negative effect on morale, while employee involvement in workplace decision-making tends to increase morale. We derive predictions on how these two mechanisms affect the decisions of firms to cut nominal wages. Using matched employer-employee and manager survey data from Great Britain, we find support for our model: nominal wage cuts are only half as likely when managers think that employees have some discretion over how they perform their work, but this reduced likelihood recovers partially when employees are involved in the decision-making process at their workplace.
    Keywords: wage rigidity; reciprocity; workplace relations; employer-employee data
    JEL: E24 E70 J31 J41
    Date: 2023–01
  3. By: Urs Fischbacher; Dorothea Kübler; Robert Stüber
    Abstract: Many occupations and industries are highly segregated with respect to gender. This segregation could be due to perceived job-specific productivity differences between men and women. It could also result from the belief that single-gender teams perform better. We investigate the two explanations in a lab experiment with students and in an online experiment with personnel managers. The subjects bet on the productivity of teams of different gender compositions in tasks that differ with respect to gender stereotypes. We obtain similar results in both samples. Women are picked more often for the stereotypically female task and men more often for the stereotypically male task. Subjects do not believe that homogeneous teams perform better but bet more on diverse teams, especially in the task with complementarities. Elicited expectations about the bets of others reveal that subjects expect the effect of the gender stereotypes of tasks but underestimate others’ bets on diversity.
    Keywords: gender segregation, hiring decisions, teams, discrimination, stereotypes
    JEL: C91 D90 J16
    Date: 2022
  4. By: Timothée Demont (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.); Daniela Horta Sáenz (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.); Eva Raiber (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.)
    Abstract: Worrisome topics, such as climate change, economic crises, or the Covid-19 pandemic, are increasingly present and pervasive due to digital media and social networks. Do such worries affect cognitive performance? The effect of a distressing topic might be very different depending on whether people have the scope and means to cope with the consequences. It can also differ by how performance is rewarded, for instance, if is there a goal that people can focus on. In an online experiment during the Covid-19 pandemic, we test how the cognitive performance of university students responds to topics discussing (i) current mental health issues related to social restrictions or (ii) future labor market uncertainties linked to the economic contraction. Moreover, we study how the response is affected by a performance goal by conditioning payout on reaching a minimum level. We find that the labor market topic increases cognitive performance when performance is motivated by a goal. Conversely, there is no such effect after the mental health topic. We even find a weak negative effect among those mentally vulnerable when payout is not based on reaching a goal. The positive effect is driven by students with larger financial and social resources, pointing at an inequality-widening mechanism.
    Keywords: cognitive performance, financial worries, COVID-19, financial incentives, anxiety, coping behaviors
    JEL: C91 D91 D81
    Date: 2023–01
  5. By: Pedro Portugal; John T. Addison; Pedro Raposo
    Abstract: Using a unique linked employer-employee dataset Portuguese dataset, the Quadros de Pessoal, 1986-2020, this paper offers an extension of the standard Mincerian model of wage determination by allowing for different returns to experience and tenure in the sequence of jobs that constitute a career of up to ten jobs. In addition to such heterogeneity, we also allow for the possibility of a distinct wage hike each time workers change jobs. We report that workers achieve the highest returns to experience on the second job. For its part, the returns to tenure are sizable, most notably on the first job. The sequence of wage uplifts attendant upon job changes reflects the returns to job search investments over the life cycle. They shape the curvature of the earnings profile, with the returns to job mobility tending to decline over the sequence of jobs. Further, the ability to distinguish the order of the jobs held by the worker enabled us to disentangle the returns to experience from those to tenure in a model with a job match fixed effects in a more satisfactory manner than the conventional routes followed in the literature. In a final application, we investigate how worker, firm, and job match heterogeneity influence the returns to mobility, experience, and tenure. The returns to job mobility were found to partially reflect sorting into better job matches and into firms offering more generous wage policies. Also, the estimated returns to experience are upwardly biased because more productive worker tend to be more experienced. However, none of the three components of the job match fixed effect had a clear impact on the returns to tenure.
    JEL: C23 J31 J63
    Date: 2022
  6. By: Hannah Schildberg-Hörisch; Marco A. Schwarz; Chi Trieu; Jana Willrodt; Marco Alexander Schwarz
    Abstract: Debates about affirmative action often revolve around fairness. Accordingly, we document substantial heterogeneity in the fairness perception of various affirmative action policies. But do these differences translate into different consequences? In a laboratory experiment, we study three different quota rules in tournaments that favor individuals whose performance is low, either due to discrimination, low productivity, or choice of a short working time. Affirmative action favoring discriminated individuals is perceived as fairest, followed by that targeting individuals with a short working time, while favoring low productivity individuals is not perceived as fairer than an absence of affirmative action. Higher fairness perceptions coincide with a higher willingness to compete and less retaliation against winners, underlining that fairness perceptions matter for the consequences of affirmative action. No policy harms overall productivity or post-competition teamwork, but affirmative action may reduce the average output of tournament winners.
    Keywords: affirmative action, fairness ideals, experiment, tournament, real effort
    JEL: C91 D02 D63
    Date: 2022
  7. By: Bloom, Nicholas; Iacovone, Leonardo; Pereira-López, Mariana; Van Reenen, John
    Abstract: We argue that greater misallocation is a key driver of the worse management practices in Mexico compared to the US. These management practices are strongly associated with higher productivity, growth, trade, and innovation. One indicator of greater misallocation in Mexico is the weaker size-management relationship compared to the US, particularly in the highly distorted Mexican service sector. Second, the size-management relationship is weaker in smaller markets, measured by distance to the US for manufacturing firms and population density for service firms. Third, municipalities with weaker institutions, measured by contract enforcement, crime, and corruption, have a weaker size-management relation. These results are consistent with frictions lowering aggregate management quality and productivity.
    Keywords: misallocation; management; performance; services; manufacturing; Mexico
    JEL: E22 F14 L25 O33 D24
    Date: 2022–01–25
  8. By: Hugo Reis; Paulo Guimarães; Pedro Portugal; Ana Rute Cardoso
    Abstract: In this paper, we quantify the impact of co-workers’ human capital on a worker’s productivity and, more specifically, the spillovers of co-workers’ education within the workplace. We identify the impact of peer quality and provide an unambiguous decomposition of the impact of unobserved heterogeneity on the estimated returns to education. We find that peer effects are quite sizeable. A one standard deviation increase in the measure of peer quality leads to a wage increase of 2.1 percent. We also unveil that an additional year of average education of co-workers yields a 0.5 percent increase in the individual own wage.
    JEL: I26 J24 J31
    Date: 2022
  9. By: Giupponi, Giulia; Machin, Stephen
    Abstract: The question of how firms set wages for their employees has been of longstanding interest. In this paper, we investigate what models of wage determination are at play in a low-wage labor market. We exploit a sizable and salient age-specific minimum wage change in the United Kingdom - the National Living Wage (NLW) introduction. Starting in April 2016, the NLW raised the minimum wage rate applying to workers aged 25 and over, leaving unchanged the minimum wage rates for younger workers. Using matched employer-employee data on the English residential care home sector, we document positive wage spillovers on workers aged under 25. Younger workers' wages are shown to have risen in tandem with those of older workers, with no differential employment effects by age at both the market level and the firm level. We probe the inter- vs intra-firm nature of wage spillovers and show that they arise within rather than between firms. Based on empirical tests and qualitative evidence from a survey of care homes in the sample, pay-equity concerns offer the most plausible explanation for the emergence of wage spillovers. The wage spillover effects that we document are shown to emerge in other low-paying sectors of the UK labor market.
    Keywords: wage determination; minimum wage; fairness
    JEL: J31 J38 J42 D63
    Date: 2022–09–13
  10. By: Manaresi, Francesco; Palma, Alessandro; Salvatici, Luca; Scrutinio, Vincenzo
    Abstract: We study the effects of a subsidy program designed to boost small and medium enterprises' export capabilities through a Temporary Export Manager (TEM), hired for at least 6 months to provide consulting on how to reach foreign markets. Firms applied online for the subsidy and vouchers to hire TEMs were allocated on a first-come, first-served basis. We use a difference-in-differences design to compare the performances of firms that nearly got the subsidy with those that barely did not. Eligible firms experienced a large increase in revenues, return on equity, profits and value added per employee, accompanied by a significant growth in export in extra-EU markets four years after receiving the subsidy. The gains were larger for the least productive and smaller firms and effects were heterogeneous across TEM providers. TEMs were also effective in stimulating 'good' labor demand: besides intensifying exports, firms increased their workforce by nearly 13%, mainly in full-time and permanent employees. Results of a survey conducted on TEM providers confirm our econometric results and revealed that the benefits of voucher extended beyond the initial subsidized service.
    Keywords: SMEs; export subsidy; labor demand; natural experiment; click-day
    JEL: L20 O40 F14 H20 F20
    Date: 2022–10–05
  11. By: Bonaccolto-Töpfer, Marina (University of Genova); Schnabel, Claus (University of Erlangen-Nuremberg)
    Abstract: Using representative data from the German Socio-Economic Panel (SOEP), this paper finds a statistically significant union wage premium in Germany of almost three percent which is not simply a collective bargaining premium. Given that the union membership fee is typically about one percent of workers' gross wages, this finding suggests that it pays off to be a union member. Our results show that the wage premium differs substantially between various occupations and educational groups, but not between men and women. We do not find that union wage premia are higher for those occupations and workers which constitute the core of union membership. Rather, unions seem to care about disadvantaged workers and pursue a wider social agenda.
    Keywords: union membership, collective bargaining, union wage premium, Germany
    JEL: J31 J53
    Date: 2023–01

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