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on Human Capital and Human Resource Management |
| By: | Norris Keiller, Agnes; Obermeier, Tim; Teichgraeber, Andreas; Van Reenen, John |
| 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 |
| JEL: | J3 L1 L6 |
| Date: | 2024–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126764 |
| By: | Sharmin Sazedj; José Tavares |
| Abstract: | This paper assesses the relevance of professional networks for the gender pay gap amongst top managers. Using data on the universe of firms in Portugal, we show that female top managersearn 25% less than their male counterparts, and that 20% of this gap is due to differences in networks. Using Gelbach’s decomposition, we find that the network effect can be ascribed to firm sorting, i.e. well-connected managers tend to be associated to higher paying firms. By examining the gender composition and the type of connections of top manager networks, we find that same gender connections are important. We conclude that connections between females can play an important role in the existing corporate framework where males areoverrepresented, and thus policies furthering female representation in leadership positions can have positive spillover effects for other women. |
| JEL: | J16 J30 J24 L14 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ptu:wpaper:w202423 |
| By: | Arntz, Melanie; Findeisen, Sebastian; Maurer, Stephan; Schlenker, Oliver |
| Abstract: | This study quantifies the relationship between workplace digitalization, i.e., the increasing use of frontier technologies, and workers' health outcomes using novel and representative German linked employer-employee data. Based on changes in individual-level use of technologies between 2011 and 2019, we find that digitalization induces similar shifts into more complex and service-oriented tasks across all workers but exacerbates health inequality between cognitive and manual workers. Unlike more mature, computer-based technologies, frontier technologies of the recent technology wave substantially lower manual workers' subjective health and increase sick leave, while leaving cognitive workers unaffected. We provide evidence that the effects are mitigated in firms that provide training and assistance in the adjustment process for workers. |
| Keywords: | health; inequality; technology; machines; automation; tasks; capital-labor substitution |
| JEL: | J21 J23 J24 O33 |
| Date: | 2024–03–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126827 |
| By: | Rachel Scarfe (School of Economics, University of Edinburgh); Daniel Schaefer (Department of Economics, Johannes Kepler University Linz); Tomasz Sulka (Duesseldorf Institute for Competition Economics, Univerity of Duesseldorf) |
| Abstract: | Many countries have recently introduced automatic enrollment programs for workplace pensions, requiring employers to pay contributions. We examine who bears the costs of such mandated pension programs, exploiting the quasi-experimental rollout of automatic enrollment in the UK. We provide two novel findings: First, total compensation (the sum of basic pay, extra pay, and employer pension contribution) increases, driven by employer contributions, while the amount of extra pay decreases. We do not find evidence that the policy affects working hours. Second, these effects differ by employer size, with extra pay declining to such an extent in large employers that total compensation does not increase. Our findings provide the first evidence that large employers shift the cost of automatic enrollment onto employees, adversely impacting take-home pay. |
| Keywords: | Mandated benefits, Staggered difference-in-differences, Employer-sponsored retirement savings, Incentive design |
| JEL: | D21 H22 J32 J38 |
| Date: | 2023–09 |
| URL: | https://d.repec.org/n?u=RePEc:edn:esedps:313 |
| By: | Norris Keiller, Agnes; Van Reenen, John |
| Abstract: | Climate change is making natural disasters more frequent, yet little is known about the capacity of firms to withstand such disasters and adapt to their increased frequency. We examine this issue using the latest wave of the World Management Survey (WMS) that includes new questions on firms' climate change perceptions and adaptation behaviour. Combining this with geocoded data on natural disasters and previous WMS waves, we create a panel spanning 8, 000 firms across 33 countries and three decades that shows exposure to disasters decreases growth inputs, outputs and firm survival. More importantly, firms with structured management practices are more resilient, suffering much smaller drops in jobs and capital. To understand the mechanisms behind this resilience, we use the new WMS climate questions to show better managed firms have more accurate perceptions of climate-related risks to their businesses. Such firms are also more likely to have implemented measures to adapt to climate change both overall and in response to their perceived climate risk. Other aspects of firm organisation, such as decentralisation, also help protect against disasters, but their adaptation behaviour is not well-targeted. These results show that improving management is one way to help protect economies from climate change shocks. |
| Keywords: | climate; natural disasters; management practices; firm performance |
| JEL: | Q54 M11 L25 H10 |
| Date: | 2024–06–13 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126782 |
| By: | Pedro S. Martins; Joao R. Ferreira |
| Abstract: | Can incentives deliver value in the public sector, despite major principal-agent challenges? We evaluate a political reform that introduced individual teacher performancerelated pay and tournaments in public schools in Portugal. We find that the focus on individual performance decreased student achievement, as measured in national exams, and increased grade inflation. The results follow from a difference-in-differences analysis of matched student-school panels and two complementary control groups: public schools in regions that were exposed to lighter reforms; and private schools, whose teachers had their incentives unchanged. Students in public schools with a higher proportion of teachers exposed to the tournament also perform worse. Overall, our results highlight the potential social costs from disruption of cooperation amongst public sector workers due to competition for promotions. |
| Keywords: | Tournaments, Public sector, Teacher merit pay, Matched school-student data |
| JEL: | I21 M52 I28 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:unl:unlfep:wp665 |
| By: | F. Cerina; L.G. Deidda; S. Nobili |
| Abstract: | We document four key trends since the pandemic - a surge in remote work, an increase in performance pay, their joint occurrence, and the skill-biased nature of this complementarity. We develop a firm-worker model that explains this evidence. We show that, under risk aversion, the incentive-compatible performance pay premium falls with worker's skills, as the likelihood of a good performance increases. Hence, the firm uses performance pay if the worker is sufficiently skilled and fixed pay with monitoring, otherwise. The unforeseen pandemic shock forces the firm to adopt remote work and reduces monitoring effectiveness. As a result, the firm relies more on performance pay. Post-pandemic, the firm always sticks to the remote work if the worker is sufficiently skilled. If the worker is too unskilled for performance pay to be cost-effective, the firm sticks to remote work only if remote monitoring is effective. Accordingly, the model predicts that a decline in remote monitoring efficacy could reduce remote work for less-skilled workers only. To test this, we exploit temporal variation in legislation in New York State, using a Difference-in-Differences approach, to estimate the impact of stricter regulations of remote monitoring on the adoption of remote work. Such a test strongly supports our model's predictions. Our findings suggest that pandemic policies and regulations may have played a significant role in shaping the adoption and persistence of remote work and performance pay. |
| Keywords: | monitoring;skills;incentives;Remote Work;Performance Pay |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202505 |
| By: | Menaka Hampole; Dimitris Papanikolaou; Lawrence D.W. Schmidt; Bryan Seegmiller |
| Abstract: | We leverage recent advances in NLP to construct measures of workers' task exposure to AI and machine learning technologies over the 2010 to 2023 period that vary across firms and time. Using a theoretical framework that allows for a labor-saving technology to affect worker productivity both directly and indirectly, we show that the impact on wage earnings and employment can be summarized by two statistics. First, labor demand decreases in the average exposure of workers' tasks to AI technologies; second, holding the average exposure constant, labor demand increases in the dispersion of task exposures to AI, as workers shift effort to tasks that are not displaced by AI. Exploiting exogenous variation in our measures based on pre-existing hiring practices across firms, we find empirical support for these predictions, together with a lower demand for skills affected by AI. Overall, we find muted effects of AI on employment due to offsetting effects: highly-exposed occupations experience relatively lower demand compared to less exposed occupations, but the resulting increase in firm productivity increases overall employment across all occupations. |
| JEL: | E20 J01 J24 O3 O33 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33509 |
| By: | João Francisco Sarno Carvalho (Cedeplar/UFMG) |
| Abstract: | This study aimed to analyze the transformations that have occurred in the regional innovation system of Minas Gerais over the past 20 years. To achieve this objective, the research was structured in three stages: (a) mapping the main agents of the innovation system of Minas Gerais; (b) describing the changes that have occurred in these agents over the past two decades; and (c) identifying the new agents that have emerged during this period. The methodological approach adopted is qualitative and descriptive in nature. To meet the proposed objectives, research was conducted based on secondary data from official databases. Data analysis was conducted using Microsoft Excel software and the Philcarto tool for generating maps, focusing on a descriptive approach. The results obtained indicate transformations of an economic, political and social nature, which aim to consolidate and achieve maturity of the innovation system in Minas Gerais. The evidence presented contributes to a deeper understanding of the role and particularities of the Minas Gerais Innovation System, offering important subsidies for the formulation of public and private policies aimed at Technological Innovation in the state. |
| Keywords: | Regional Innovation System. Minas Gerais Innovation System. Technological Innovation. |
| JEL: | O38 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdp:texdis:td679 |