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on Human Capital and Human Resource Management |
| By: | Juan Dubra; Rob Waiser; Jean-Pierre Benoit |
| Abstract: | Employee burnout has long plagued firms. The prevalence of burnout shows that work-related effort is not only costly in the present but has carryover effects into the future. We incorporate this ‘effort cost spillover’ into a dynamic, two- period principal-agent model, where the worker’s effort cost in the second period increases in both their second-period and first-period efforts. We use this model to explore optimal compensation design and the connection between incentives, burnout, and turnover. Naturally, turnover may occur if it is easy to replace workers, or if firms fail to account for burnout when designing contracts. However, we show that even when turnover is very costly, and firms and workers properly understand effort cost spillover, the firm’s equilibrium strategy may be to offer high-powered incentives that induce workers to work so hard that they exit (i.e. reject any contract that the firm would offer) in the next period. Workplace measures that reduce spillover, such as flexible work arrangements, can limit turnover and improve profits dramatically. Committing to contracts for both periods in advance can also limit turnover (at the cost of reduced flexibility). |
| Keywords: | compensation, incentives, dynamic games, burnout, agency theory |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:mnt:wpaper:2512 |
| By: | Larissa Fuchs; Matthias Heinz; Pia Pinger; Max Thon |
| Abstract: | We conduct a randomized controlled trial (RCT) with a leading technology firm to study how highlighting flexibility and career advancement in job advertisements causally affects the applicant pool. Highlighting career advancement increases the number of applications from men for entry-level positions and attracts additional applicants with strong qualifications and a good fit, which in turn leads to more interview invitations. By contrast, highlighting flexibility increases applications from both women and men at the entry level but provides limited evidence of attracting higher-quality or better-fit applicants. A complementary survey experiment among STEM students shows how job advertisements shape beliefs about the firm’s job characteristics and work environment. Overall, our results show that the amenities firms choose to highlight can powerfully influence both the size and characteristics of their applicant pool. |
| Keywords: | hiring, field experiments, job advertisements, gender |
| JEL: | M51 M52 D22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12331 |
| By: | Bisi, Davide; Landini, Fabio; Rinaldi, Riccardo |
| Abstract: | The interaction between organised employee representation (ER) and firms' engagement in the green transition remains insufficiently understood. Theoretically, two opposing mechanisms may operate. In the bargaining view, representation can slow green investments by increasing adjustment costs and exposing firms to rent-seeking pressures. In contrast, the employee voice perspective holds that ER enables sustainability by facilitating information exchange, eliciting workers' environmental preferences, and supporting joint problem-solving when organisational adaptation is required. We test these predictions using survey and administrative data from nearly 2, 000 firms in Emilia-Romagna. Firms with ER are systematically more likely to pursue green investments, especially in climate mitigation, water use, circularity, and pollution prevention. These results also hold when accounting for the endogeneity of ER via IV. Consistent with the voice mechanism, the association between ER and green investments is stronger in firms employing younger and more educated workers, who are more likely to hold proenvironmental preferences and contribute specialised knowledge relevant for organisational change. Taken together, our findings challenge the view that organised labour inhibits the green transition. Instead, ER emerges as a strategic policy lever that can foster decarbonisation pathways that are technologically feasible, socially negotiated, and democratically anchored at the workplace level. |
| Keywords: | worker voice, employee representation, sustainability, climate change, green investments |
| JEL: | J50 O33 Q50 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1699 |
| By: | Radosveta Ivanova-Stenzel (TU Berlin); Michel Tolksdorf (TU Berlin) |
| Abstract: | Despite the documented benefits of algorithmic decision-making, individuals often prefer to retain control rather than delegate decisions to AI agents. To what extent are the aversion to and distrust of algorithms rooted in a fundamental discomfort with giving up decision authority? Using two incentivized laboratory experiments across distinct decision domains, hiring (social decision-making) and forecasting (analytical decision-making), and decision architecture (nature and number of decisions), we elicit participants’ willingness to delegate decisions separately to an AI agent and a human agent. This within-subject design enables a direct comparison of delegation preferences across different agent types. We find that participants consistently underutilize both agents, even when informed of the agents’ superior performance. However, participants are more willing to delegate to the AI agent than to the human agent. Our results suggest that algorithm aversion may be driven less by distrust in AI and more by a general preference for decision autonomy. This implies that efforts to increase algorithm adoption should address broader concerns about control, rather than focusing solely on trust-building interventions. |
| Keywords: | algorithm; delegation; artificial intelligence; trust in ai; experiment; preferences; |
| JEL: | C72 C91 D44 D83 |
| Date: | 2025–12–22 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:558 |
| By: | Cesar Barreto; Antoine Bertheau; Dogan Gulumser; Alexander Hijzen; Astrid Kunze; Marta Lachowska; Anne Sophie Lassen; Salvatore Lattanzio; Benjamin Lochner; Stefano Lombardi; Jody Meekes; Balazs Murakozy; Oskar Nordstrom Skans; Marco Palladino |
| Abstract: | We quantify the role of gender-specific firm wage premiums in explaining the private-sector gender gap in hourly wages using a harmonized research design across 11 matched employer-employee datasets—ten European countries and Washington state, USA. These premiums contribute to the gender wage gap through two channels: women’s concentration in lower-paying firms (sorting) and women receiving lower premiums than men within the same firm (pay-setting). We find that firm wage premiums account for 10 to 30 percent of the gender wage gap. While both mechanisms matter, sorting is the predominant driver of the firm contribution to the gender wage gap in most countries. We document three patterns that are broadly consistent across countries: (1) women’s sorting into lower-paying firms increases with age; (2) women are more concentrated in low-paying firms with a high share of part-time workers; and (3) women receive about 90 percent of the rents that men receive from firm surplus gains. |
| Keywords: | Gender wage gap; Firms; Cross country comparison |
| JEL: | C52 J24 J31 J71 |
| Date: | 2025–12–08 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedhwp:102275 |
| By: | Storm, Eduard; Gonschor, Myrielle; Schmidt, Marc Justin |
| Abstract: | We study how artificial intelligence (AI) affects workers' earnings and employment stability, combining German job vacancy data with administrative records from 2017-2023. Identification comes from changes in workers' exposure to local AI skill demand over time, instrumented with national demand trends. We find no meaningful displacement or productivity effects on average, but notable skill heterogeneity: expert workers with deep domain knowledge gain while non-experts often lose, with returns shaped by occupational task structures. We also document AI-driven reinstatement effects toward analytic and interactive tasks that raise earnings. Overall, our results imply distributional concerns but also job-augmenting potential of early AI technologies. |
| Keywords: | AI, Online Job Vacancies, Skill Demand, Worker-level Analysis, Employment, Earnings, Expertise |
| JEL: | D22 J23 J24 J31 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:333893 |