nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒11‒06
seven papers chosen by
Patrick Kampkötter, Eberhard Karls Universität Tübingen

  1. The impact of high temperatures on performance in work-related activities By Matteo Picchio; Jan van Ours
  2. Enhancing Workplace Performance: Exploring the Influence of Intrinsic and Extrinsic Motivation on Employees' Productivity in Iligan City's Appliance Retail Industry By Zoemarie Baluarte; Cielo Vincent Tocmo; Ma Lynflora Pendang; Michael Jere Abiol; George Hamoy; Ruben Lee
  3. The Turing Transformation: Artificial Intelligence, Intelligence Augmentation, and Skill Premiums By Ajay K. Agrawal; Joshua S. Gans; Avi Goldfarb
  4. Bonus Question: Does Flexible Incentive Pay Dampen Unemployment Dynamics? By Meghana Gaur; John Grigsby; Jonathon; Abdoulaye Ndiaye
  5. Ownership Networks and Earnings Inequality By Huneeus, Federico; Larrain, Borja; Larrain, Mauricio; Prem, Mounu
  6. The Wage Effects of Employers' Associations: A Case Study of the Private Schools Sector By Martins, Pedro S.
  7. The Impact of Restricting Fixed-Term Contracts on Labor and Skill Demand By Grasso, Giuseppe; Tatsiramos, Konstantinos

  1. By: Matteo Picchio (Marche Polytechnic University); Jan van Ours (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: 2023–10–12
  2. By: Zoemarie Baluarte (Iligan Medical Center College); Cielo Vincent Tocmo (Iligan Medical Center College); Ma Lynflora Pendang (Iligan Medical Center College); Michael Jere Abiol (Iligan Medical Center College); George Hamoy (Iligan Medical Center College); Ruben Lee (Iligan Medical Center College)
    Abstract: Motivated employees are the cornerstone of organizational success, with their performance directly influencing productivity and competitiveness. This study investigated the interplay between intrinsic and extrinsic motivation factors and their effects on employee productivity within the appliance retail industry in Iligan City. The research employed a cross-sectional survey design, encompassing 50 firstlevel managers and rank-and-file employees selected randomly from five prominent appliance stores. The study leveraged a well-validated questionnaire and statistical tools, including correlation analysis and multiple linear regression, to explore the relationships between motivation factors and employee productivity. The findings underscored the significance of both intrinsic and extrinsic motivation in fostering workplace engagement and performance. Key results revealed a strong positive correlation between intrinsic and extrinsic motivation factors and employee productivity, indicating that employees who experience higher levels of motivation tend to be more productive. The multiple linear regression analysis further substantiated these findings, explaining approximately 36.1% of the variance in employee productivity. In conclusion, this research illuminated the pivotal role of motivation in shaping workplace productivity, offering actionable insights for organizations seeking to optimize their workforce's potential. By understanding and harnessing the power of motivation, businesses in the appliance retail sector can create environments that drive employee engagement, elevate job performance, and ultimately secure a competitive edge in their respective markets.
    Keywords: Extrinsic motivation, Iligan, Intrinsic motivation, Productivity
    Date: 2023–06–15
  3. By: Ajay K. Agrawal; Joshua S. Gans; Avi Goldfarb
    Abstract: We ask whether a technical objective of using human performance of tasks as a benchmark for AI performance will result in the negative outcomes highlighted in prior work in terms of jobs and inequality. Instead, we argue that task automation, especially when driven by AI advances, can enhance job prospects and potentially widen the scope for employment of many workers. The neglected mechanism we highlight is the potential for changes in the skill premium where AI automation of tasks exogenously improves the value of the skills of many workers, expands the pool of available workers to perform other tasks, and, in the process, increases labor income and potentially reduces inequality. We label this possibility the “Turing Transformation.” As such, we argue that AI researchers and policymakers should not focus on the technical aspects of AI applications and whether they are directed at automating human-performed tasks or not and, instead, focus on the outcomes of AI research. In so doing, our goal is not to diminish human-centric AI research as a laudable goal. Instead, we want to note that AI research that uses a human-task template with a goal to automate that task can often augment human performance of other tasks and whole jobs. The distributional effects of technology depend more on which workers have tasks that get automated than on the fact of automation per se.
    JEL: J2 O3
    Date: 2023–10
  4. By: Meghana Gaur (Princeton University); John Grigsby (Princeton University); Jonathon (London School of Economics (LSE); Centre for Macroeconomics (CFM)); Abdoulaye Ndiaye (NYU Stern)
    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-a-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.
    Date: 2023–09
  5. By: Huneeus, Federico; Larrain, Borja; Larrain, Mauricio; Prem, Mounu
    Abstract: We use matched employer-employee data together with data on the ownership networks of Chilean firms to document a novel relationship between inequality in labor income and ownership structures. Exploiting transitions of firms in and out of networks, we show that network affiliation is associated with higher inequality along two dimensions. First, network firms pay higher average wages than stand-alone firms, increasing between-firm inequality. Second, the dispersion of wages within a network firm is higher than within a stand-alone firm, increasing within-firm inequality. The effects are driven by increases in the wages of top workers, and by the entry of new top workers. Our findings shed light on the relationship between ownership structures and the distribution of labor income in the economy.
    Keywords: Earnings premium;Earnings inequality;Business groups;Ownership
    JEL: G32 J31
    Date: 2022–05
  6. By: Martins, Pedro S. (Nova School of Business and Economics)
    Abstract: Does employers' association (EA) membership affect wages? Such effects, positive or negative, could follow from increased productivity, employer collusion, or other channels. We analyse this question drawing on matched employer-employee panel data, including time-varying EA affiliation and worker mobility. We consider the case of private schools in Portugal, 2010-2020, and its single EA, and develop a method to define the sector's scope. We find that school fixed effects reduce the EA wage premium considerably. However, such positive premium remains, especially when focusing on the key occupation of the industry (teachers) and when considering EA firms that follow firm-specific (non-EA) collective agreements. We also find that there is an EA wage premium for schools that join the EA, while the EA premium does not disappear for schools that leave the EA.
    Keywords: employers organisations, worker mobility, social dialogue
    JEL: J53 J62 L40
    Date: 2023–09
  7. By: Grasso, Giuseppe (University of Luxembourg, LISER); Tatsiramos, Konstantinos (University of Luxembourg, LISER)
    Abstract: This paper examines the impact of increasing the relative cost of fixed-term contracts on labor demand as well as the demand for standard measures of human capital and specific skill requirements. We evaluate a 2018 Italian labor law reform that raised the cost of fixed- term contracts while keeping permanent contract costs unchanged. We employ a difference-in-differences research design, leveraging the variation in firms' exposure to the reform resulting from their diverse reliance on fixed-term contracts due to differing reactions to earlier labor market reforms. Using rich data covering the near universe of online job vacancies in Italy, our findings indicate that the increase in hiring costs for temporary contracts led to a decrease in the relative demand for temporary workers and an increase in the demand for permanent workers. This shift in demand was accompanied by upskilling towards workers with higher levels of human capital and specific skill requirements. When offering jobs under permanent contracts, firms increased their demand for workers with a college degree and social skills. At the same time, they reduced their demand for workers with only a high school degree and no work experience. On the other hand, when offering jobs under fixed-term contracts, firms increased their demand for workers with some work experience and social skills. These findings suggest that while restricting fixed-term contracts encouraged the hiring of permanent workers, such reforms might have unintended consequences by raising the hiring standards for job entry, thereby reducing employment opportunities for less qualified workers.
    Keywords: hiring costs, employment protection, dual labor markets, skills
    JEL: J23 J24 J63 K31
    Date: 2023–10

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