nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒10‒09
seven papers chosen by
Patrick Kampkötter, Eberhard Karls Universität Tübingen

  1. Overeducation, Performance Pay and Wages: Evidence from Germany By Baktash, Mehrzad B.
  2. The Gender Pay Gap: Micro Sources and Macro Consequences By Iacopo Morchio; Christian Moser
  3. Working More for Less: Part-time Penalties Across the Working Hours Distribution? By Tom Günther; Ulrich C. Schneider; Fabian Stürmer-Heiber
  4. Graying and Staying on the Job: The Welfare Implications of Employment Protection for Older Workers By Morris, Todd; Dostie, Benoit
  5. Allocative Skill By Andrew Caplin; David J. Deming; Søren Leth-Petersen; Ben Weidmann
  6. The Impact of High Temperatures on Performance in Work-Related Activities By Picchio, Matteo; van Ours, Jan C.
  7. The allocation of authority in organizations: a field experiment with bureaucrats By Bandiera, Oriana; Best, Michael Carlos; Khan, Adnan; Prat, Andrea

  1. By: Baktash, Mehrzad B.
    Abstract: Overeducated workers are more productive and have higher wages in comparison to their adequately educated coworkers in the same jobs. However, they face a series of challenges in the labor market, including lower wages in comparison to their similarly educated peers who are in correctly matched jobs. Yet, less consensus exists over the adjustment mechanisms to overcome the negative consequences of overeducation. This study examines the hypotheses that overeducated workers sort into performance pay jobs as an adjustment mechanism and that performance pay moderates their wages. Using German Socio-Economic Panel, I show that overeducation associates with a higher likelihood of sorting into performance pay jobs and that performance pay moderates the wages of overeducated workers positively. It also holds in endogenous switching regressions accounting for the potential endogeneity of performance pay. Importantly, the positive role of performance pay is particularly larger for the wages of overeducated women.
    Keywords: Performance Pay, Overeducation, Wages, Educational Mismatch, Sorting
    JEL: I21 J24 J31 J33 M52
    Date: 2023
  2. By: Iacopo Morchio; Christian Moser
    Abstract: Using linked employer-employee data from Brazil, we document a large gender pay gap due to women working at lower-paying employers with better amenities. To interpret these facts, we develop an equilibrium search model with endogenous firm pay, amenities, and employment. We provide a constructive proof of identification of all model parameters. The estimated model suggests that amenities are important for men and women, that compensating differentials explain half of the gender pay gap, and that there are significant output and welfare gains from eliminating gender differences. However, equal-treatment policies fail to achieve those gains.
    Keywords: Monopsony; Amenities; Earnings inequality; Linked employer-employee data; Equilibrium search model; Taste-based discrimination; Worker and firm heterogeneity; Compensating differentials
    JEL: J16 J32 E24 J31
    Date: 2023–09–06
  3. By: Tom Günther; Ulrich C. Schneider; Fabian Stürmer-Heiber
    Abstract: We use German administrative and survey data to investigate the heterogeneity of part-time penalties in hourly wages and growth rates. Exploiting tax reforms for identification, we find substantial heterogeneity in part-time wage penalties from −28.3% to −7.2% compared to full-time. The heterogeneity in wage growth penalties is less pronounced. Both penalties do not decrease linearly with additional working hours. More weekly working hours might result in a higher hourly wage penalty. The shape of the penalties is driven by workers with non-demanding tasks and professions where working around 30 weekly hours is uncommon, and relatively many females work.
    Keywords: part-time employment, wage dynamics, female labor supply
    JEL: J16 J24 J31
    Date: 2023–09–15
  4. By: Morris, Todd (HEC Montreal); Dostie, Benoit (HEC Montreal)
    Abstract: We study the welfare implications of employment protection for older workers, exploiting recent bans on mandatory retirement across Canadian provinces. Using linked employer- employee tax data, we show that the bans cause large and similar reductions in job separation rates and retirement hazards at age 65, with further reductions at higher ages. The effects vary substantially across industries and firms, and around two-fifths of the adjustments occur between ban announcement and implementation dates. We find no evidence that the demand for older workers falls, but the welfare effects are mediated by spillovers on savings behavior, workplace injuries, and spousal retirement timing.
    Keywords: employment protection, retirement, welfare, active and passive savings responses, health effects, spousal spillovers
    JEL: J26 J78 H55
    Date: 2023–09
  5. By: Andrew Caplin; David J. Deming; Søren Leth-Petersen; Ben Weidmann
    Abstract: Jobs increasingly require good decision-making. Workers are valued not only for how much they can do, but also for their ability to decide what to do. In this paper we develop a theory and measurement paradigm for assessing individual variation in the ability to make good decisions about resource allocation, which we call allocative skill. We begin with a model where agents strategically acquire information about factor productivity under time and effort constraints. Conditional on such constraints, agents’ allocative skill can be defined as the marginal product of their attention. We test our model in a field survey where participants act as managers assigning fictional workers with heterogeneous productivity schedules to job tasks and are paid in proportion to output. Allocative skill strongly predicts full-time labor earnings, even conditional on IQ, numeracy, and education, and the return to allocative skill is greater in decision-intensive occupations.
    JEL: D8 J24
    Date: 2023–09
  6. By: Picchio, Matteo (Università Politecnica delle Marche, Ancona); van Ours, Jan C. (Erasmus University Rotterdam)
    Abstract: High temperatures can have a negative effect on work-related activities. Labor productivity may go down because mental health or physical health is worse when it is too warm. Workers may experience difficulties concentrating or they have to reduce effort in order to cope with heat. We investigate how temperature affects performance of male professional tennis players. We use data about outdoor singles matches from 2003 until 2021. Our identification strategy relies on the plausible exogeneity of short-term daily temperature variations in a given tournament from the average temperature over the same tournament. We find that performance significantly decreases with ambient temperature. The magnitude of the temperature effect is age-specific and skill-specific. Older and less-skilled players suffer more from high temperatures than younger and more skilled players do. The effect of temperature on performance is smaller when there is more at stake. Our findings also suggest that there is adaptation to high temperatures: the effects are smaller if the heat lasts for several days.
    Keywords: climate change, temperatures, tennis; performance, productivity
    JEL: J24 J81 Q51 Q54
    Date: 2023–09
  7. By: Bandiera, Oriana; Best, Michael Carlos; Khan, Adnan; Prat, Andrea
    Abstract: We design a field experiment to study how the allocation of authority between frontline procurement officers and their monitors affects performance both directly and through the response to incentives. In collaboration with the government of Punjab, Pakistan, we shift authority from monitors to procurement officers and introduce financial incentives in a sample of 600 procurement officers in 26 districts. We find that autonomy alone reduces prices by 9% without reducing quality and that the effect is stronger when the monitor tends to delay approvals for purchases until the end of the fiscal year. In contrast, the effect of performance pay is muted, except when agents face a monitor who does not delay approvals. Time use data reveal agents' responses vary along the same margin: autonomy increases the time devoted to procurement, and this leads to lower prices only when monitors cause delays. By contrast, incentives work when monitors do not cause delays. The results illustrate that organizational design and anti-corruption policies must balance agency issues at different levels of the hierarchy.
    Keywords: IGC 37118-PAK; IGC 1-VCS-VPAK-VXXXX-37208
    JEL: D02 D73 H57
    Date: 2021–11–01

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