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on Human Capital and Human Resource Management |
| By: | Marco Clemens (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University) |
| Abstract: | Managers frequently offer unconditional bonuses and profit-sharing payments to their employees. The isolated effects of the former payment type on job satisfaction, in particular, have received little empirical attention. This study uses German panel data and shows that, even when total income is held constant, workers report significantly higher levels of job satisfaction when wages contain such bonuses, mostly regardless of their relative size. Conversely, profit-sharing payments show a positive association only if they are sufficiently large. However, when endogeneity issues are taken into account, the latter correlation becomes weaker or vanishes. The findings have significant implications for managers when designing salary packages since they imply that monetary gifts in the form of unconditional bonus payments can be a beneficial alternative to incentives in enhancing employee’s job satisfaction. |
| Keywords: | bonuses, profit-sharing, gift-exchange, incentives, job satisfaction |
| JEL: | J33 M52 M54 I31 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:iaa:dpaper:202406 |
| By: | Agnes Norris-Keiller; Tim Obermeier; Andreas Teichgraeber; John Van Reenen |
| Abstract: | When labour market competition is imperfect, positive industry (and firm) productivity shocks can be passed through to workers in the form of higher wages. We document how the UK auto industry, following a period of decline, experienced a four-decade-long productivity boom. There was a thirteen-fold increase in real output per worker between 1980 and 2018, compared to a four-fold increase in manufacturing. Greater foreign ownership, tougher competition and improved industrial relations all likely played a role. The greater use of intermediate inputs (outsourcing) and growing capital intensity account for most of this growth, but we estimate that TFP still grew three times as fast in the auto industry than the rest of manufacturing. Examining whether this productivity increase has been shared with employees, we find that auto workers experienced far stronger hourly wage growth than workers in the rest of manufacturing. After controlling for individual fixed effects, the auto wage premium relative to the rest of manufacturing doubled from 8% in the 1980s to 17% in the 2010s. Interpreted through the lens of a rent sharing model, we estimate that most of the wage increase (63% in the baseline case) can be accounted for by the auto productivity boom. In contrast, the bargaining power of UK auto workers seems to have fallen. If worker power had held up at the 1980s level, the wage premium would have been about 38% higher in the 2010s. |
| Keywords: | wages, firms, market performance, manufacturing, automotive |
| Date: | 2024–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2015 |
| By: | Bonacini, Luca; Patriarca, Fabrizio; Santoni, Edoardo |
| Abstract: | This paper investigates the relationship between intergenerational inequality and differences in pay policies among firms. We examine whether the effects of parental background in firm selection contribute to the persistence of income inequality across generations, and particularly how this can enhance the understanding of transmission mechanisms beyond the traditional role of education. We first apply a two-way fixed-effects wage estimation, a' la AKM, to the Italian private sector. Our results indicate that the allocation of workers to firms with different wage policies is significantly influenced by the economic background of their parents. This influence on wages is significant and relatively greater than the impact of individual worker characteristics. Furthermore, the background effect amplifies from initial jobs to job changes and negatively affects the sorting between firm and worker types. |
| Keywords: | Firm effect, Intergenerational inequality, Labor market, Unobservable abilities, Wage inequality |
| JEL: | I24 J21 J24 J31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1459 |
| By: | Lipowski, Cäcilia; Salomons, Anna; Zierahn-Weilage, Ulrich |
| Abstract: | We study how new digital technology reshapes vocational training and skill acquisition and its impact on workers' careers. We construct a novel database of legally binding training curricula and changes therein, spanning the near universe of vocational training in Germany over five decades, and link curriculum updates to breakthrough technologies using Natural Language Processing techniques. Our findings reveal that technological advances drive training updates, with curriculum content evolving towards less routine intensive tasks, and greater use of digital and social skills. Using administrative employer-employee data, we show that educational updates help workers adapt to new demands for their expertise, and earn higher wages compared to workers with outdated skills. These findings highlight the role of changes in withinoccupational skill supply in meeting evolving labor market demands for non-college educated workers. |
| Keywords: | Technological Change, Vocational Training, Skill Updating |
| JEL: | J23 J24 J31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300271 |
| By: | Findeisen, Sebastian; Dauth, Wolfgang; Schlenker, Oliver |
| Abstract: | New technologies drive productivity growth but the distribution of gains might be unequal and is mediated by labor market institutions. We study the role that organized labor plays in shielding incumbent workers from the potential negative consequences of automation. Combining German individual-level administrative records with information on plant-level robot adoption and the presence of works councils, a form of shop-floor worker representation, we find positive moderating effects of works councils on retention for incumbent workers during automation events. Separations for workers with replaceable task profiles are significantly reduced. When labor markets are tight and replacement costs are high for firms, incumbent workers become more valuable and the effects of works councils during automation events start to disappear. Older workers, who find it more challenging to reallocate to new employers, benefit the most from organized labor in terms of wages employment. Concerning mechanisms we find that robot-adopting plants with works councils employ not more but higher quality robots. They also provide more training during robot adoption and have higher productivity growth thereafter. |
| Keywords: | automation, organized labor, work councils, labor market tightness, worker re-training |
| JEL: | J20 J30 J53 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cexwps:300230 |
| By: | Julian Budde (University of Bonn); Thomas Dohmen (University of Bonn, Institute of Labor Economics); Simon Jäger (Massachusetts Institute of Technology); Simon Trenkle (Institute of Labor Economics) |
| Abstract: | We study the descriptive and substantive representation of workers through worker representatives, focusing on the selection of German works council representatives and their impact on worker outcomes. Becoming a professional representative leads to substantial wage gains for the elected, concentrated among blue-collar workers. Representatives are positively selected in terms of pre-election earnings and person fixed effects. They are more likely to have undergone vocational training, show greater interest in politics, and lean left politically compared to the employees they represent; blue-collar workers are close to proportionally represented among works councilors. Drawing on a retirement-IV strategy and event-study designs around council elections, we find that blue-collar representatives reduce involuntary separations, consistent with blue-collar workers placing stronger emphasis on job security. |
| Keywords: | Worker representatives, works councils, linked administrative and survey data |
| JEL: | J51 J53 P16 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:330 |