nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒10‒30
six papers chosen by
Patrick Kampkötter, Eberhard Karls Universität Tübingen

  1. Social Skills and the Individual Wage Growth of Less Educated Workers By Aghion, Philippe; Bergeaud, Antonin; Blundell, Richard; Griffith, Rachel
  2. The Effectiveness of Management Training Programs: A Meta-Analytic Review By Busso, Matías; Park, Kyunglin; Irazoque, Nicolás
  3. Organizational Change and Reference-Dependent Preferences By Klaus Schmidt; Jonas von Wangenheim
  4. Bonus Question: Does Flexible Incentive Pay Dampen Unemployment Dynamics? By Meghana Gaur; John R. Grigsby; Jonathon Hazell; Abdoulaye Ndiaye
  5. Employee Trust and Performance Constraints in Public Sector Organizations By Keefer, Philip; Vlaicu, Razvan
  6. Artificial Intelligence and Workers' Well-Being By Giuntella, Osea; König, Johannes; Stella, Luca

  1. By: Aghion, Philippe (LSE); Bergeaud, Antonin (HEC Paris); Blundell, Richard (University College London); Griffith, Rachel (University of Manchester)
    Abstract: We use matched employee-employer data from the UK to highlight the importance of social skills, including the ability to work well in a team and communicate effectively with co-workers, as a driver for individual wage growth for workers with few formal educational qualifications. We show that lower educated workers in occupations where social skills are more important experience steeper wage growth with tenure, and also higher early exit rates, than equivalent workers in occupations where social skills are less important. Moreover, the return to tenure in occupations where social skills are important is stronger in firms with a larger share of higher educated workers. We rationalize our findings using a model of wage bargaining with complementarity between the skills and abilities of less educated workers and the firm's other assets.
    Keywords: team work, social skills, individual wage growth, firm pay premium
    JEL: J31 J24 L25
    Date: 2023–09
  2. By: Busso, Matías; Park, Kyunglin; Irazoque, Nicolás
    Abstract: We conduct a meta-analysis of 44 studies and 68 different managerial skills training programs, with the aim of identifying program characteristics that can lead to more effective public policies promoting firm growth and entrepreneurship. We synthesize 431 estimates to assess the effects of these programs on firm performance. Our findings show that, on average, managerial skills development programs have positive returns on management practices, firm productivity, profits, and survival. We also examine how program and participant specifications affect program effectiveness. Our analysis suggests that, on average, business training programs focused on human resources, soft skills, marketing, and finance-accounting, especially when organized by local organizations, tend to result in better firm performance. Moreover, training of potential entrepreneurs and managers in specifically targeted sectors such as agriculture, manufacturing, or services was more likely to result in improvement compared to non-targeted programs. Finally, our results indicate that programs that involve both male and female participants are more likely to enjoy higher effects from managerial training interventions.
    JEL: J24 L25 M13
    Date: 2023–04
  3. By: Klaus Schmidt (LMU Munich); Jonas von Wangenheim (University of Bonn)
    Abstract: Reference-dependent preferences can explain several puzzling observations about organizational change. We introduce a dynamic model in which a loss-neutral firm bargains with loss-averse workers over organizational change and wages. We show that change is often stagnant or slow for long periods followed by a sudden boost in productivity during a crisis. Moreover, it accounts for the fact that different firms in the same industry often have significant productivity differences. The model also demonstrates the importance of expectation management even if all parties have rational expectations. Social preferences explain why it may be optimal to divide a firm into separate entities.
    Keywords: organizational change; productivity; reference points; loss aversion; social preferences;
    JEL: D23 D91 L2
    Date: 2023–10–04
  4. By: Meghana Gaur; John R. Grigsby; Jonathon Hazell; Abdoulaye Ndiaye
    Abstract: We introduce dynamic incentive contracts into a model of unemployment dynamics and present three results. First, wage cyclicality from incentives does not dampen unemployment dynamics: the response of unemployment to shocks is first-order equivalent in an economy with flexible incentive pay and without bargaining, vis-á-vis an economy with rigid wages. Second, wage cyclicality from bargaining dampens unemployment dynamics through the standard mechanism. Third, our calibrated model suggests 46% of wage cyclicality in the data arises from incentives. A standard model without incentives calibrated to weakly procyclical wages, matches unemployment dynamics in our incentive pay model calibrated to strongly procyclical wages.
    JEL: E24 E32 J33 J41 J64
    Date: 2023–09
  5. By: Keefer, Philip; Vlaicu, Razvan
    Abstract: Theory suggests that employee trust is key to productivity in organizations, but empirical evidence documenting links between trust and constraints on performance is scarce. This paper analyzes self-collected data on public sector employees from eighteen Latin American countries and finds that individual-level trust is relevant to three types of performance factors. First, high-trust employees are more willing to collaborate and share information with coworkers and are more supportive of technological innovation. Second, high-trust respondents have different perceptions of organizational constraints: they are less concerned with low staff quality or lack of discretion to innovate, and more concerned with staff shortages. Third, trust in coworkers is associated with stronger mission motivation. Instrumental variable strategies based on the transmission of trust through social and professional channels account for potential sources of endogeneity. A survey experiment on preferences for social distancing policies provides further evidence that trust enhances mission motivation: employee policy preferences align better with the implied government policy when their trust in the public sector is higher.
    Keywords: Trust;performance;public sector;mission motivation;Survey experiments
    JEL: D23 D73 H83
    Date: 2022–12
  6. By: Giuntella, Osea (University of Pittsburgh); König, Johannes (DIW Berlin); Stella, Luca (Free University of Berlin)
    Abstract: This study explores the relationship between artificial intelligence (AI) and workers' well-being and mental health using longitudinal survey data from Germany (2000-2020). We construct a measure of individual exposure to AI technology based on the occupation in which workers in our sample were first employed and explore an event study design and a difference-in-differences approach to compare AI-exposed and non-exposed workers. Before AI became widely available, there is no evidence of differential pre-trends in workers' well-being and concerns about their economic futures. Since 2015, however, with the increasing adoption of AI in firms across Germany, we find that AI-exposed workers have become less satisfied with their life and job and more concerned about job security and their personal economic situation. However, we find no evidence of a significant impact of AI on workers' mental health, anxiety, or depression.
    Keywords: artificial intelligence, future of work, well-being, mental health
    JEL: I10 J28 O30
    Date: 2023–09

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