nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2024‒01‒15
eight papers chosen by
Patrick Kampkötter, Eberhard Karls Universität Tübingen

  1. On-the Job Wage Dynamics By Eric Smith
  2. Employment Protection, Job Insecurity, and Job Mobility By Bertoni, Marco; Chinetti, Simone; Nistico, Roberto
  3. How Do Firms Deal with the Risks of Employing Ex-prisoners? By Köllő, János; Boza, István; Ilyés, Virág; Kőműves, Zsófia; Mark, Lili Katalin
  4. Use of Digital Technologies for HR Management in Germany: Survey Evidence By Marina Chugunova; Anastasia Danilov
  5. Diversity in Teams By Miaomiao Dong; Tatiana Mayskaya; Vladimir Smirnov; Olivia Taylor; Andrew Wait
  6. Innovation Booms, Easy Financing, and Human Capital Accumulation By Johan Hombert; Adrien Matray
  7. Self-control and Performance while Working from Home By Julia Baumann; Anastasia Danilov; Olga Stavrova
  8. Technological Change and Returns to Training By Klauser, Roman; Tamm, Marcus

  1. By: Eric Smith
    Abstract: This paper assesses wage setting and wage dynamics in a search and matching framework where (i) workers and firms on occasion meet multilaterally; (ii) workers can recall previous encounters with firms; and (iii) firms cannot commit to future wages and workers cannot commit to not searching on the job. The resulting progression of wages (from firms paying just enough to keep their workers) yields a compensation structure consistent with well established but difficult to reconcile observations on pay dynamics within jobs at firms. Along with wage tenure effects, serial correlation in wage changes and wage growth are negatively correlated with initial wages.
    Keywords: wage dynamics, stock-flow matching, on-the-job search, no commitment
    JEL: J31 J63 J64
    Date: 2023
  2. By: Bertoni, Marco (University of Padova); Chinetti, Simone (University of Naples Federico II); Nistico, Roberto (University of Naples Federico II)
    Abstract: This study leverages the Italian Jobs Act reform as a natural experiment to examine the impact of reduced employment protection on job insecurity and job mobility. The reform significantly lowered protection for open-ended contract workers in large firms hired after March 7, 2015, and introduced a sharp discontinuity in severance pay at 2-year tenure. Treated employees exhibit increased fear of job loss and higher termination rates. The higher job insecurity prompts workers in low-pay sectors and in low-quality firms to actively pursue job mobility, transitioning towards higher-paying positions. Conversely, workers in high-paying sectors respond by intensifying their efforts to secure their existing jobs. Crucially, all effects disappear for workers above the 2-year tenure threshold, when they become entitled to a 50% higher severance pay. These findings emphasize a complex trade-off behind the design of employment protection systems, as addressing early-stage insecurity with tailored social insurance may counteract upward mobility effects.
    Keywords: employment protection, job insecurity, job mobility, on-the-job search
    JEL: J22 J28 J41 J65
    Date: 2023–12
  3. By: Köllő, János (Institute of Economics, Budapest); Boza, István (Central European University, Budapest); Ilyés, Virág (HUN-REN Centre for Economic and Regional Studies); Kőműves, Zsófia (Cambridge Economic Policy Associates); Mark, Lili Katalin (Central European University, Budapest)
    Abstract: We use linked employer-employee data to investigate a large sample of past and future prisoners in Hungary, 2003-2011. We first compare their jobs, focusing on attributes that can reduce the penalty the employer must pay for a mistaken hiring decision. Second, we study if employers insure themselves by paying lower wages to ex-prisoners. Third, we analyze whether the probability of the match dissolving within a few months is lower if the firm could potentially base its hiring decision on referrals. The composition of former prisoners' employment is biased toward easy-to-cancel jobs. In the unskilled jobs held by most of them, they do not earn less than future convicts, but a minority in white-collar positions are paid significantly less. Ex-prisoners' jobs are less likely to dissolve quickly if the hiring firm potentially had access to co-worker, employer, or labor office referrals.
    Keywords: incarceration, reintegration, mobility, discrimination, Hungary
    JEL: J71 J23 J63
    Date: 2023–12
  4. By: Marina Chugunova (Max Planck Institute for Innovation and Competition); Anastasia Danilov (HU Berlin)
    Abstract: Using a survey with 57 German firms, we evaluate the level of digitalization of the human resource management (HRM) function and document perceived benefits and barriers of technology adoption from organizational and individual users’ perspectives. The results give reason for optimism. Most of the companies report that the core HR processes are digitized. We do not observe adverse effects of the digital HRM tools on users’ job satisfaction and work stress. Still, more than half of companies do not yet use digital tools for strategic HRM decisions. Respondents appreciate the increased speed and cost-efficiency of digital HR processes and associate them with a competitive advantage in talent acquisition. The most prominent barriers to adoption are lack of qualified professionals, high costs, and uncertainty regarding the legal framework. Additionally, we test whether small and medium-sized enterprises differ systematically from larger organizations in how they use digital HRM tools.
    Keywords: digital HRM tools; human resource management; digitalization; Germany;
    JEL: M12 M15 M50 O33 O52
    Date: 2023–12–18
  5. By: Miaomiao Dong; Tatiana Mayskaya; Vladimir Smirnov; Olivia Taylor; Andrew Wait
    Abstract: From corporate boards to innovative teams, the benefits of diversity are increasingly being praised. In this paper, we investigate how optimal cognitive diversity depends on the nature of production and the objective criterion employed. With a utilitarian objective, when the output of the most productive worker becomes relatively more important, optimal diversity weakly increases. To capture the preferences of a public service provider, a regulated firmor a very risk averse manager, we also consider a Rawlsian objective. While optimal diversity under the Rawlsian objective might decrease as the output of the most productive worker becomes relatively more important, optimal diversity is alwaysweakly higherwith the Rawlsian objective than with the utilitarian one. Our result suggests that a diverse outcome can be achieved by adjusting a team’s objective rather than controlling diversity directly.
    Keywords: cognitive diversity, submodular, supermodular, teams, utilitarian, Rawlsian objective
    Date: 2023–11
  6. By: Johan Hombert; Adrien Matray
    Abstract: Innovation booms are often fueled by easy financing that allows new technology firms to pay high wages that attracts skilled labor. Using the late 1990s Information and Communication Technology (ICT) boom as a laboratory, we show that skilled labor joining this new sector experienced sizeable long-term earnings losses. We show these earnings patterns are explained by faster skill obsolescence rather than either worker selection or the overall bust in the ICT sector. During the boom, financing flowed more to firms whose workers would experience the largest productivity declines, amplifying the negative effect of labor reallocation on aggregate human capital accumulation.
    JEL: E23 J24 O33
    Date: 2023–12
  7. By: Julia Baumann (Wirtschaftszentrum Berlin für Sozialforschung); Anastasia Danilov (HU Berlin); Olga Stavrova (Universität Lübeck)
    Abstract: This study explores the role of trait self-control in individuals’ changes in performance and well-being when working from home (WFH). In a three-wave longitudinal study with UK workers in the midst of the COVID-19 pandemic, we find that low self-control workers experienced a significant positive adjustment to WFH over time: The number of reported work distractions decreased, and self-assessed performance increased over the period of four months. In contrast, high self-control individuals did not show a similar upward trajectory. Despite the positive adjustment of low self-control individuals over time, on average, self-control was still positively associated with performance and negatively associated with work distractions. However, trait self-control was not consistently associated with changes in well-being. These findings provide a more nuanced view on trait self-control, suggesting that low self-control individuals can improve initial performance over time when working from home.
    Keywords: self-control; working from home; productivity;
    Date: 2023–12–18
  8. By: Klauser, Roman (RWI); Tamm, Marcus (Hochschule der Bundesagentur für Arbeit (HdBA))
    Abstract: Do returns to training differ if training is accompanied by technological innovations at the workplace? We analyze this potential heterogeneity of returns based on panel data from Germany that provide a unique measure for individuals' adoption of new technology at the workplace. In the preferred analysis we run fixed effects estimations. As a robustness test we also allow for individual time trends. The findings indicate positive wage effects and more job stability for training participants in general but no effects on wages and job mobility for new technology adoption. Furthermore, the combined occurrence of new technology adoption and of training participation does not make individuals better off in terms of wages or job stability compared with individuals experiencing neither training nor new technology adoption.
    Keywords: returns to education, training, technology
    JEL: I26 J24 J62 M53 O33
    Date: 2023–12

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