nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒11‒13
eight papers chosen by
Patrick Kampkötter, Eberhard Karls Universität Tübingen

  1. Accounting for firms in gender-ethnicity wage gaps throughout the earnings distribution By Van Phan; Carl Singleton; Alex Bryson; John Forth; Felix Ritchie; Lucy Stokes; Damian Whittard
  2. Social Ties at Work and Effort Choice: Experimental Evidence from Tanzania By Martin Chegere; Paolo Falco; Andreas Menzel
  3. The Impact of Restricting Fixed-Term Contracts on Labor and Skill Demand By Giuseppe Grasso; Konstantinos Tatsiramos
  4. CEO Turnover and Director Reputation By Felix von Meyerinck; Jonas Romer; Markus Schmid
  5. Graying and staying on the job: The welfare implications of employment protection for older workers By Morries, Todd; Dostie, Benoît
  6. Technological Innovations and Workers’ Job Insecurity: The Moderating Role of Firm Strategies By Mauro Caselli; Andrea Fracasso; Arianna Marcolin; Sergio Scicchitano
  7. Using Milestones as a Source of Feedback in Teamwork: Insights from a Dynamic Voluntary Contribution Mechanism By Nisvan Erkal; Boon Han Koh; Nguyen Lam
  8. Labor Market Dynamics with Sorting By Schulz, Bastian

  1. By: Van Phan (Bristol Business School, University of West of England); Carl Singleton (Department of Economics, University of Reading); Alex Bryson (Social Research Institute, University College London); John Forth (Bayes Business School, City, University of London); Felix Ritchie (Bristol Business School, University of West of England); Lucy Stokes (National Institute of Economic and Social Research (NIESR)); Damian Whittard (Bristol Business School, University of West of England)
    Abstract: Previous studies of gender-ethnicity wage gaps have almost exclusively been confined to analyses of household data, so do not fully account for employer influence and wage-setting power. Exploiting high quality employer-employee payroll data on jobs, hours, and earnings, linked with the personal and family characteristics of workers from the population census for England and Wales, we show that firm-specific wage effects account for sizeable parts of the estimated differences between the wages of white and ethnic minority workers at the mean and other points in the wage distribution, which would otherwise mostly have been attributed to differences in individual worker attributes, such as education levels, occupations, and locations. Nevertheless, substantial gaps persist between the wages of white and ethnic minority employees, especially among higher earners. These patterns differ notably by gender and whichever ethnic minority group is compared with white workers. Since most of the wage disadvantage for ethnic minorities appears to sit within firms, our findings suggest that recent legislative reforms on firm-level gender pay gap transparency could be worth extending in the UK, to encompass gender-ethnicity gaps.
    Keywords: Employer-Employee Data, Unconditional Quantile Regression, Decomposition Methods, UK Labour Market
    JEL: J31 J7 J71
    Date: 2023–10–26
  2. By: Martin Chegere; Paolo Falco; Andreas Menzel
    Abstract: Many firms hire workers via social networks. Whether workers who are socially connected to their employers exert more effort on the job is an unsettled debate. We address this question through a novel experiment with small-business owners in Tanzania. Participants are paired with a worker who conducts a real-effort task, and receive a payoff that depends on the worker’s effort. Some business owners are randomly paired with workers they are socially connected with, while others are paired with strangers. With a design that is sufficiently powered to detect economically meaningful effects, we find that being socially connected to one’s employer does not affect workers’ effort.
    Keywords: firms, hiring, productivity, social ties, kinship networks
    JEL: O17 M51 L2
    Date: 2023–09
  3. By: Giuseppe Grasso; Konstantinos Tatsiramos
    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- indifferences 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
  4. By: Felix von Meyerinck (University of Zurich); Jonas Romer (University of St. Gallen); Markus Schmid (University of St. Gallen; Swiss Finance Institute; ECGI)
    Abstract: This paper analyzes the reputational effects of forced CEO turnovers on outside directors. Directors interlocked to a forced CEO turnover experience large and persistent increases in withheld votes at subsequent re-elections relative to non-turnover-interlocked directors. Reputational losses are larger for turnovers with a higher potential for disrupting a firm's management, for directors favorably inclined to the CEO, and for directors with a committee-based responsibility for monitoring the CEO. Our results imply that the average forced CEO turnover signals a governance failure at the board level, and that shareholders rely on salient actions to update their beliefs about directors' hidden qualities.
    Keywords: CEO turnover, director elections, director reputation, CEO succession, shareholder voting
    JEL: G32 G34
    Date: 2023–10
  5. By: Morries, Todd; Dostie, Benoît
    Abstract: We study the welfare implications of employment protection for older workers, exploiting recent bans on mandatory retirement across Canadian provinces. Using linked employeremployee 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
  6. By: Mauro Caselli; Andrea Fracasso; Arianna Marcolin; Sergio Scicchitano
    Abstract: In this paper, we empirically assess whether the perceived implications of technological innovations on the probability of job loss vary according to the innovation-related strategies adopted by firms. We take advantage of a unique dataset based on a large and representative cross-sectional survey covering several characteristics of Italian workers and their firms. We find that the relationship between technological innovations and job insecurity is moderated by firms’ technology-specific training programs, their dismissal plans, and the impact of innovations on the tasks and activities performed by workers. Thus, workers’ perceptions of job insecurity vary significantly across innovative firms and the adoption of technological innovations in the workplace has a multifaceted impact on the perceptions of job insecurity of the affected workers.
    Keywords: job insecurity, technology, innovation, firms
    JEL: J28 O33
    Date: 2023
  7. By: Nisvan Erkal (Department of Economics, University of Melbourne); Boon Han Koh (Department of Economics, University of Exeter); Nguyen Lam (Department of Economics, University of Melbourne)
    Abstract: Many economic activities rely on teamwork where groups of individuals work together for a common goal by pooling their resources or skills. However, cooperation within teams can be challenging due to the social dilemma problem which arises when individual incentives interfere with operational effectiveness. We study teamwork in a dynamic public goods game setting where individuals make multiple contribution decisions to a team project and face strategic uncertainty about the behavior of their team members. We examine whether providing feedback about the team’s progress at regular intervals (time-based feedback) or based on the achievement of milestones (milestone-based feedback) is more beneficial for increasing aggregate contributions. Our results reveal that providing milestone-based feedback leads to a significant increase in aggregate team contributions as compared to time-based feedback. This impact is largely driven by conditional cooperators. Findings from a follow-up experiment reveal evidence of a goal effect, a signaling effect, and an information effect arising from the use of milestones on the behavior of conditional cooperators.
    Keywords: teamwork, public good provision, milestones, feedback, voluntary contribution mechanism
    JEL: C92 D83 D91 H41
    Date: 2023–09–12
  8. By: Schulz, Bastian (Aarhus University)
    Abstract: I study a dynamic search-matching model with two-sided heterogeneity, a production complementarity that induces labor market sorting, and aggregate shocks. In response to a positive productivity shock, incentives to sort increase disproportionately. Firms respond by posting additional vacancies, and the strength of the response is increasing in firm productivity. The distribution of unemployment worker types adjusts slowly, which amplifies job creation in the short run. In the long run, falling unemployment curtails the firms' vacancy posting. The model closely matches time-series moments from U.S. labor market data and produces realistic degrees of wage dispersion and labor market sorting.
    Keywords: search, matching, sorting, mismatch, aggregate shocks, worker heterogeneity, firm heterogeneity, unemployment dynamics
    JEL: E24 E32 J63 J64
    Date: 2023–09

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