nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2024‒01‒22
seven papers chosen by
Patrick Kampkötter, Eberhard Karls Universität Tübingen

  1. Mapping the Dynamics of Management Styles— Evidence from German Survey Data By Florian Englmaier; Michael Hofmann; Stefanie Wolter
  2. The Anatomy of Sorting—Evidence From Danish Data By Rasmus Lentz; Suphanit Piyapromdee; Jean-Marc Robin
  3. Firms and Worker Health By Alexander Ahammer; Analisa Packham; Jonathan Smith
  4. When Protection Becomes Exploitation: The Impact of Firing Costs on Present-Biased Employees By Florian Englmaier; Matthias Fahn; Ulrich Glogowski; Marco A. Schwarz
  5. Is the Gender Pay Gap Largest at the Top? By Ariel J. Binder; Amanda Eng; Kendall Houghton; Andrew Foote
  6. Customer Discrimination in the Workplace: Evidence from Online Sales By Erin M. Kelley; Gregory V. Lane; Matthew Pecenco; Edward A. Rubin
  7. Are Women Less Effective Leaders than Men? Evidence from Experiments Using Coordination Games By Lea Heursen; Eva Ranehill; Roberto Weber

  1. By: Florian Englmaier (LMU Munich); Michael Hofmann (LMU München); Stefanie Wolter (IAB Nürnberg)
    Abstract: We study how firms adjust the bundles of management practices they adopt over time, using repeated survey data collected in Germany from 2012 to 2018. By employing unsupervised machine learning, we leverage high-dimensional data on human resource policies to describe clusters of management practices (management styles). Our results suggest that two management styles exist, one of which employs many and highly structured practices, while the other lacks these practices but retains training measures. We document sizeable differences in styles across German firms, which can (only) partially be explained by firm characteristics. Further, we show that management is highly persistent over time, in part because newly adopted practices are discontinued after a short time. We suggest miscalculations of cots-benefit trade-offs and non-fitting corporate culture as potential hindrances of adopting structured management. In light of previous findings that structured management increases firm performance, our findings have important policy implications since they show that firms which are managed in an unstructured way fail to catch up and will continue to underperform.
    Keywords: management practices; personnel management; panel data analysis; machine learning;
    JEL: M12 D22 C38
    Date: 2023–12–14
  2. By: Rasmus Lentz (University of Wisconsin-Madison, Aarhus University [Aarhus]); Suphanit Piyapromdee (UCL - University College of London [London]); Jean-Marc Robin (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this paper, we formulate and estimate a flexible model of job mobility and wages with two‐sided heterogeneity. The analysis extends the finite mixture approach of Bonhomme, Lamadon, and Manresa (2019) and Abowd, McKinney, and Schmutte (2019) to develop a new Classification Expectation‐Maximization algorithm that ensures both worker and firm latent‐type identification using wage and mobility variations in the data. Workers receive job offers in worker‐type segmented labor markets. Offers are accepted according to a logit form that compares the value of the current job with that of the new job. In combination with flexibly estimated layoff and job finding rates, the analysis quantifies the four different sources of sorting: job preferences, segmentation, layoffs, and job finding. Job preferences are identified through job‐to‐job moves in a revealed preference argument. They are in the model structurally independent of the identified job wages, possibly as a reflection of the presence of amenities. We find evidence of a strong pecuniary motive in job preferences. While the correlation between preferences and current job wages is positive, the net present value of the future earnings stream given the current job correlates much more strongly with preferences for it. This is more so for short‐ than long‐tenure workers. In the analysis, we distinguish between type sorting and wage sorting. Type sorting is quantified by means of the mutual information index. Wage sorting is captured through correlation between identified wage types. While layoffs are less important than the other channels, we find all channels to contribute substantially to sorting. As workers age, job arrival processes are the key determinant of wage sorting, whereas the role of job preferences dictate type sorting. Over the life cycle, job preferences intensify, type sorting increases, and pecuniary considerations wane.
    Keywords: Heterogeneity, wage distributions, employment and job mobility, mutual information, finite mixtures, EM algorithm, classification algorithm, sorting, decomposition of wage inequality
    Date: 2023–11
  3. By: Alexander Ahammer; Analisa Packham; Jonathan Smith
    Abstract: We estimate the role of firms in worker health care utilization. Using linked administrative data on Austrian workers from 1998-2018, we exploit mobility between firms to estimate how much a firm contributes to worker-level differences in utilization in a setting with non-employer provided universal health care. We find that firms are responsible for nearly 30 percent of the variation in across-worker health care expenditures. Effects are not driven by changes in geography or industry. We then estimate a measure of relative firm-specific utilization and explore existing correlates to help explain these effects.
    JEL: H51 I1
    Date: 2023–12
  4. By: Florian Englmaier (LMU Munich); Matthias Fahn (JKU Linz); Ulrich Glogowski (JKU Linz); Marco A. Schwarz (DICE)
    Abstract: Employment protection harms early-career employees without benefitting them in later career stages (Leonardi and Pica, 2013). We demonstrate that this pattern can result from employers exploiting na¨ıve present-biased employees. Employers offer a dynamic contract with low early-career wages, an unattractive intermediate qualification stage, and high end-of-career wages. Upon reaching the qualification stage, present-biased employees exchange future wages for immediate rewards on an alternative career path – a choice unanticipated by their previous, na¨ıve, self. Thus, employers never pay high future wages. Firing costs help employers indicate that they will not oust employees instead of making promised payments, enabling early-career wage cuts.
    Keywords: employment protection laws; present bias; dynamic contracting;
    JEL: D21 D90 J33 K31 M52
    Date: 2023–12–14
  5. By: Ariel J. Binder; Amanda Eng; Kendall Houghton; Andrew Foote
    Abstract: No: it is at least as large at bottom percentiles of the earnings distribution. Conditional quantile regressions reveal that while the gap at top percentiles is largest among the most-educated, the gap at bottom percentiles is largest among the least-educated. Gender differences in labor supply create more pay inequality among the least-educated than they do among the most-educated. The pay gap has declined throughout the distribution since 2006, but it declined more for the most-educated women. Current economics-of-gender research focuses heavily on the top end; equal emphasis should be placed on mechanisms driving gender inequality for noncollege-educated workers.
    Keywords: gender pay gap, education, conditional quantile regression, glass ceiling, labor supply
    JEL: I24 J16 J31
    Date: 2023–12
  6. By: Erin M. Kelley; Gregory V. Lane; Matthew Pecenco; Edward A. Rubin
    Abstract: Many workers are evaluated on their ability to engage with customers. We measure the impact of gender-based customer discrimination on the productivity of online sales agents in Sub-Saharan Africa. Using a novel framework that randomly varies the gender of names presented to customers without changing worker behavior, we find the assignment of a female-sounding name leads to 50 percent fewer purchases. Customers also lag in responding, are less expressive, and avoid discussing purchases. We show similar results for customers around the world and across workers. Removing customer bias, we find women would be more productive than their male co-workers.
    JEL: J16 O12
    Date: 2023–12
  7. By: Lea Heursen (HU Berlin); Eva Ranehill (University of Gothenburg, Lund University); Roberto Weber (University of Zurich)
    Abstract: We study whether one reason behind female underrepresentation in leadership is that female leaders are less effective at coordinating followers’ actions. Two experiments using coordination games investigate whether female leaders are less successful than males in persuading followers to coordinate on efficient equilibria. In these settings, successful coordination hinges on higher-order beliefs about the leader’s capacity to convince followers to pursue desired actions, making beliefs that women are less effective leaders potentially self-confirming. We find no evidence that such bias impacts actual leadership performance, precisely estimating the absence of a gender leadership gap. We further show that this result is surprising given experts’ priors.
    Keywords: gender; coordination games; leadership; experiment;
    JEL: D23 C72 C92 J1
    Date: 2023–12–05

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