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on Human Capital and Human Resource Management |
| By: | Hannah Illing (University of Bonn, Institute for Employment Research (IAB) & Institute of Labor Economics (IZA)); Hanna Schwank (University of Bonn & Institute of Labor Economics (IZA)); Linh T. Tô (Boston University) |
| Abstract: | We investigate how the same hiring opportunity leads to different labor market outcomes for male and female full-time workers. To study firms’ wage-setting behavior following exogenous vacancies, we analyze the wages of new hires after sudden worker deaths between 1981 and 2016. Using admin- istrative data from Germany, we apply a novel technique to identify external replacement workers, and we use machine learning to compare replacements hired for comparable positions by similar firms. We find that female replacement workers’ starting wages are, on average, 10 log points lower than those of replacing men of the same productivity. Differences in labor supply, within-firm ad- justments, or outside options do not explain this gap; instead, we attribute it to gender differences in bargaining. We conclude that a significant portion of the gender wage gap emerges within firms at the hiring stage. |
| Keywords: | Gender Wage Gap, Hiring, Labor Supply |
| JEL: | J2 J31 J63 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:339 |
| By: | Christina Brinkmann (University of Bonn); Simon Jäger (Massachusetts Institute of Technology (MIT), NBER & CEPR); Moritz Kuhn (University of Mannheim & CEPR); Farzad Saidi (University of Bonn & CEPR); Stefanie Wolter (IAB Nuremberg) |
| Abstract: | Governments use short-time work (STW) schemes to subsidize job preservation during crises. We study the take-up of STW and its effects on worker outcomes and firm behavior using German administrative data from 2009 to 2021. Establishments utilizing STW tend to have higher wages, be larger, and have falling employment even before STW take-up. More adverse selection occurred during the COVID-19 pandemic. Within firms, STW is targeted towards workers likely to stay even in the absence of STW. To study the effects of STW, we examine two dimensions of policy variation: STW eligibility and extensions of potential benefit duration (PBD). Workers above retirement age, ineligible for STW, have identical employment trajectories compared to their slightly younger, eligible peers when their establishment takes up STW. A 2012 reform doubling PBD from 6 to 12 months did not secure employment at treated firms 12 months after take-up, with minimal heterogeneity across worker characteristics. However, treated and control firms experienced substantial and persistent differences in their wage trajectories, with control firms without extensions lowering wages compared to treated firms. Across cells, larger wage effects corresponded with smaller employment effects, consistent with downward wage flexibility preventing layoffs and substituting for the employment protection effects of STW. Our research designs reveal that STW extensions in Germany did not significantly improve short- or long-term employment outcomes. |
| Keywords: | Stabilization policies, short-time work, wage rigidity, labor market institutions, intra-firm insurance |
| JEL: | J01 J08 J30 J41 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:340 |
| By: | Scur, Daniela; Ohlmacher, Scott W.; Van Reenen, John; Bennedsend, Morten; Bloom, Nick; Choudhary, M. Ali; Foster, Lucia; Groenewegen, Jesse; Grover, Arti; Hardemanh, Sjoerd; Iacovone, Leonardo; Kambayashi, Ryo; Laible, Marie-Christine; Lemos, Renata; Li, Hongbin; Linarello, Andrea; Maliranta, Mika; Medvedevi, Denis; Mengo, Charlotte; Touya, John Miles; Mandirola, Natalia; Ohlsbom, Roope; Ohyamas, Atsushi; Patnaik, Megha; Pereira-López, Mariana; Sadun, Raffaella; Senga, Tatsuro; Qian, Franklin; Zimmermann, Florian |
| Abstract: | A country’s national income broadly depends on the quantity and quality of workers and capital. But how well these factors are managed within and between firms may be a key determinant of a country’s productivity and its GDP. Although social scientists have long studied the role of management practices in shaping business performance, their primary tool has been individual case studies. While useful for theory-building, such qualitative work is hard to scale and quantify. We present a large, scalable dataset measuring structured management practices at the business level across multiple countries. We measure practices related to performance monitoring, target-setting, and human resources. We document a set of key stylized facts, which we label “the international empirics of management”. In all countries, firms with more structured practices tend to also have superior economic performance: they are larger in scale, are more profitable, have higher labor productivity and are more likely to export. This consistency was not obvious ex-ante, and being able to quantify these relationships is valuable. We also document significant variation in practices across and within countries, which is important in explaining differences in the wealth of nations. The positive relationship between firm size and structured management practices is stronger in countries with more open and free markets, suggesting that stronger competition may allow firms with more structured management practices to grow larger, thereby potentially raising aggregate national income. |
| Keywords: | management practices; productivity; firm performance; misallocation |
| JEL: | J1 J50 |
| Date: | 2024–11–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125967 |
| By: | Keefer, Quinn (California State University San Marcos); Kniesner, Thomas J. (Claremont Graduate University) |
| Abstract: | Our research interest is in the existence and size of possible peer effects in pay or whether a worker may get a higher salary because another worker does rather than being related to a change in the worker’s productivity or market forces. Previous research, which has concentrated on executive pay, suffers from the inability to control for labor market forces. We net out market forces by studying a group of particular U.S. pro football players who are subject to a tightly budgeted unionized institutional arrangement affecting certain players pay set in the offseason. Our empirical results for NFL wide-receivers and cornerbacks during 2013-2022 are that there is an elasticity of average contract value with respect to the largest contract already signed in the offseason of about 0.17. Players we study who sign the largest contract during the offseason at the time of signing generate significant pay spillovers to players signing subsequent offseason contracts, suggesting that their compensation is economically and statistically significantly impacted by peer group reference points. |
| Keywords: | labor market reference point effects, NFL player pay, fixed effects, quantile regression, influence analysis |
| JEL: | J31 J33 Z21 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17440 |
| By: | Danielle Li; Lindsey Raymond; Peter Bergman |
| Abstract: | This paper views hiring as a contextual bandit problem: to find the best workers over time, firms must balance exploitation (selecting from groups with proven track records) with exploration (selecting from under-represented groups to learn about quality). Yet modern hiring algorithms, based on supervised learning approaches, are designed solely for exploitation. Instead, we build a resume screening algorithm that values exploration by evaluating candidates according to their statistical upside potential. Using data from professional services recruiting within a Fortune 500 firm, we show that this approach improves the quality (as measured by eventual hiring rates) of candidates selected for an interview, while also increasing demographic diversity, relative to the firm's existing practices. The same is not true for traditional supervised learning based algorithms, which improve hiring rates but select far fewer Black and Hispanic applicants. Together, our results highlight the importance of incorporating exploration in developing decision-making algorithms that are potentially both more efficient and equitable. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.03616 |
| By: | Yulia Evsyukova; Felix Rusche; Wladislaw Mill |
| Abstract: | We assess the impact of discrimination on Black individuals’ job networks across the U.S. using a two-stage field experiment with 400+ fictitious LinkedIn profiles. In the first stage, we vary race via AI-generated images only and find that Black profiles’ connection requests are 13 percent less likely to be accepted. Based on users’ CVs, we find widespread discrimination across social groups. In the second stage, we exogenously endow Black and White profiles with the same networks and ask connected users for career advice. We find no evidence of direct discrimination in information provision. However, when taking into account differences in the composition and size of networks, Black profiles receive substantially fewer replies. Our findings suggest that gatekeeping is a key driver of Black-White disparities. |
| Keywords: | discrimination, job networks, labor markets, field experiment |
| JEL: | J71 J15 C93 J46 D85 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11433 |