|
on Human Capital and Human Resource Management |
| By: | Sydnee Caldwell; Ingrid Haegele; Jörg Heining |
| Abstract: | Whether and how workers search on the job depends on their beliefs about pay and working conditions in other firms. Yet little is known about workers' knowledge of outside pay. We use a large-scale survey of full-time German workers, linked to their Social Security records, to elicit pay expectations and preferences over specific outside firms. Workers believe that they face considerable heterogeneity in their outside pay options, and direct their search toward firms they believe would pay them more. Workers' expected firm-specific pay premia are highly correlated with pay policies observed in administrative records and with workers' valuations of firm-specific amenities. Most workers are unwilling to search for a new job—or leave their current firm—even for substantial pay increases. Switching costs are equivalent to 7 to 18% of a worker’s annual pay. Attachment varies across firms, and cannot be explained by either differences in firm-specific amenities or switching costs. |
| JEL: | J0 J3 J30 J31 J32 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33445 |
| By: | Morten Bennedsen; Antoine Bertheau; Marianna Kudlyak; Birthe Larsen |
| Abstract: | We use a novel large-scale survey of firms, implemented in Denmark in 2021 and linked to administrative data, to study why firms lay off workers instead of cutting wages. Our questions on layoffs, wage cuts, and the link between them provide new insights into firms’ strategies for adjusting labor in response to adverse shocks. We find that layoffs are more prevalent than wage cuts, but wage cuts are not rare in firms experiencing revenue reduction and were used by 15% of such firms. Employers are hesitant to cut wages in many instances because they see wage cuts as a poor substitute for layoffs. First, firms report that lowering wages triggers costs through the impact on morale and quits. Comparing these costs with potential savings from wage cuts, most employers in the survey agree that a wage reduction would not have saved jobs. Second, firms report that a crisis is an opportune time for layoffs because of lower opportunity costs of restructuring and because layoffs during a crisis are perceived by workers as more fair. We find that firms that report such opportunistic layoffs are less likely to implement wage cuts. |
| Keywords: | wage rigidity; layoffs |
| JEL: | D22 J30 J63 J23 |
| Date: | 2025–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedfwp:99558 |
| By: | Paulo Bastos; Monteiro, Natalia P.; Straume, Odd Rune |
| Abstract: | This paper exploits gaps between observed and recently forecasted Gross Domestic Product growth in export destinations to estimate the effects of unexpected demand shocks on worker compensation. Using employer-employee panel data, the paper finds that the revenues from these demand shocks are partly transmitted to workers in the form of higher average wages, especially close to the top of the within-firm wage distribution. These wage responses occur both in the form of higher overtime payment and base wage increases. The findings also show that there are significant increases in bonus-related pay in firms managed by high-skilled managers, and the unequal average distribution of unexpected revenues is also mainly driven by wage effects in the same subset of firms. This suggests that the way in which revenues from unexpected demand shocks are transmitted to workers is significantly related to managerial capabilities. |
| Date: | 2024–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10925 |
| By: | Nikunlaakso, Risto; Airaksinen, Jaakko M.; Pekkarinen, Laura; Aalto, Ville; Toivio, Pauliina; Kivimäki, Mika; Laitinen, Jaana; Ervasti, Jenni |
| Abstract: | Employee turnover is a challenge for public sector employers. In this study, we used machine learning to develop and validate models to predict actualized turnover of Finnish public sector workers. The development cohort data (N=52 291) included 158 variables from 2018. We defined overall turnover (regardless of reason) and net turnover (excluding workers in retirement age) through eligibility to a follow-up survey in 2020. The validation cohort included 9030 hospital workers who responded to survey in 2017, with turnover assessed in 2019. Area under the curve (AUC) value was 0.75 (95% CI: 0.74-0.76) for overall turnover and 0.75 (95% CI 0.73-0.76) for net turnover. The validation yielded similar AUC values. Key predictors of turnover were younger age, shorter job tenure, and turnover intentions totaling over 70% of the net gain. Work-related exposures, of which low threat of lay-off and satisfaction with challenges at work were most important, had considerably lower predictive power (about 1% each). These results may offer insights for public sector employers in their efforts to reduce employee turnover. |
| Date: | 2024–09–26 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:254bd_v1 |
| By: | John Bonney; Luigi Pistaferri; Alessandra Voena |
| Abstract: | Using multiple administrative data sources from Norway, we examine how firm performance changes after entrepreneurs become parents. Female-owned businesses experience a substantial decline in profits, steadily decreasing to 30% below baseline ten years post-childbirth. In contrast, male-owned businesses show no decline, often growing in revenues and costs after childbirth. The profit decline for female-owned firms is most pronounced among highly capable entrepreneurs, women who are majority owners, and those with working spouses. Entrepreneurial effort is key to performance, and our findings suggest that time demands from childbirth and childcare are a significant determinant of the decline in firm profits. |
| JEL: | J13 J16 L25 L26 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33448 |
| By: | Schmeißer, Aiko; Katharina Maria Fietz |
| Abstract: | This paper studies the impact of working with same-race coworkers on individuals’ retention at firms. Using administrative employer-employee data from Brazil, the paper exploits unexpected deaths of workers from different racial groups as exogenous shocks to peer group composition. The findings show that a decrease in the non-white share of coworkers reduces the retention of non-white workers but does not affect the retention of white workers. The effects are driven by non-whites quitting and moving to new jobs with more peers of the same race than in their old jobs. The findings highlight how peer dynamics can contribute to racial segregation across workplaces. |
| Date: | 2024–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10899 |
| By: | Jackie M.L. Chan; Michael Irlacher; Michael Koch; Luca Macedoni |
| Abstract: | This paper reveals a new determinant of wage markdowns at the firm level, namely, the product scope. Using matched employer-employee data on Danish manufacturing firms, we document a negative elasticity between wages and firm scope, which is of a similar magnitude but opposite sign as the firm-size wage premium. We rationalize the wage discount using a theory where workers value the opportunity to switch product lines as an amenity. Multiproduct firms exercise their monopsony power to offer lower wages. Our findings have important implications for understanding labor market dynamics in times of rising concentration from the contribution of large multiproduct firms. |
| Keywords: | multiproduct firms, monopsony power, wages, amenities, labor share |
| JEL: | J31 J42 L25 D21 F10 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11674 |
| By: | Frederik Almar; Benjamin Friedrich; Ana Reynoso; Bastian Schulz; Rune Vejlin |
| Abstract: | This paper studies how family and firm investments interact to explain gender gaps in career achievement. Using Danish administrative data, we first document novel evidence of this interaction through a “spousal effect” on firm-side career investments. This effect is accounted for by family labor supply choices that shape worker characteristics, which then influence firms’ training and promotion decisions. Our main theoretical contribution is to develop a quantitative life cycle model that captures these family-firm interactions through household formation, families’ joint career and fertility choices, and firms’ managerial training and promotion decisions. We then use the estimated model to show that the interaction between families and firms in the joint equilibrium of labor and marriage markets is important when evaluating firm-side and family-side policy interventions. We find that gender-equal parental leave and a managerial quota can both improve gender equality, but leave implies costly skill depreciation, whereas the quota raises aggregate welfare, in part through adjustments in marital sorting towards families that invest in women. |
| Keywords: | gender inequality, career investments, firm training, management promotions, marriage market matching |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11659 |
| By: | Carlos Carrillo-Tudela; Fraser Summerfield; Ludo Visschers |
| Abstract: | We investigate cyclical changes in workers’ task portfolios, highlighting their direction, magnitude, and distribution. Task changes are not only very common but provide information about the skills required across jobs. During recessions, a larger share of employer switches do not involve task changes. When changes occur, they tend to be more substantial. The cyclicality of task changes among employer-to-employer movers contrasts sharply with that of hires from unemployment. We link our findings to the “sullying” and “cleansing” effects of recessions, uncovering a novel cleansing effect associated with employer-to-employer transitions and a sullying effect tied to employer changes through unemployment. |
| Keywords: | career change, occupational mobility, tasks, business cycles |
| JEL: | E32 J24 J62 E24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11660 |