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on Human Capital and Human Resource Management |
| By: | Angelova, Vera; Attanasi, Giuseppe; Hiriart, Yolande |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:25818&r=hrm |
| By: | Katharina Eckartz (Friedrich-Schiller-University Jena, International Max Planck Research School on Adapting Behavior in a Fundamentally Uncertain World); Oliver Kirchkamp (Chair for Empirical and Experimental Economics, Friedrich-Schiller-University Jena); Daniel Schunk (University of Mainz) |
| Abstract: | We compare performance in a word based creativity task under three incentive schemes: a flat fee, a linear payment and a tournament. Furthermore, we also compare performance under two control tasks (Raven's advanced progressive matrices or a number-adding task) with the same treatments. In all tasks we find that incentives seem to have very small effects and that differences in performance are predominantly related to individual skills. |
| Keywords: | Creativity, Incentives, Real effort task, Experimental economics |
| JEL: | C91 J33 |
| Date: | 2012–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-068&r=hrm |
| By: | Fehr, Ernst (University of Zurich); Herz, Holger (University of Zurich); Wilkening, Tom (University of Melbourne) |
| Abstract: | Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authority-delegation game. Individuals often retain authority even when its delegation is in their material interest – suggesting that authority has non-pecuniary consequences for utility. Authority also leads to over-provision of effort by the controlling parties, while a large percentage of subordinates under-provide effort despite pecuniary incentives to the contrary. Authority thus has important motivational consequences that exacerbate the inefficiencies arising from suboptimal delegation choices. |
| Keywords: | organizational behavior, incentives, experiments and contracts |
| JEL: | C92 D83 D23 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7030&r=hrm |
| By: | Bartling, Björn; Fehr, Ernst; Schmidt, Klaus M. |
| Abstract: | Employment contracts give a principal the authority to decide flexibly which task his agent should execute. However, there is a tradeoff, first pointed out by Simon (1951), between flexibility and employer moral hazard. An employment contract allows the principal to adjust the task quickly to the realization of the state of the world, but he may also abuse this flexibility to exploit the agent. We capture this tradeoff in an experimental design and show that principals exhibit a strong preference for the employment contract. However, selfish principals exploit agents in one-shot interactions, inducing them to resist entering into employment contracts. This resistance to employment contracts vanishes if fairness preferences in combination with reputation opportunities keep principals from abusing their power, leading to the widespread, endogenous formation of efficient long-run employment relations. Our results inform the theory of the firm by showing how behavioral forces shape an important transaction cost of integration – the abuse of authority – and by providing an empirical basis for assessing differences between the Marxian and the Coasian view of the firm, as well as Alchian and Demsetz’s (1972) critique of the Coasian approach. |
| Keywords: | theory of the firm; transaction cost economics; authority; power abuse; employment relation; fairness; reputation |
| JEL: | C91 D23 D86 M5 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:391&r=hrm |
| By: | Hartog, Joop (University of Amsterdam); Sattinger, Michael (University at Albany, SUNY) |
| Abstract: | The paper provides a theoretical foundation for the empirical regularities observed in estimations of wage consequences of overeducation and undereducation. Workers with more education than required for their jobs are observed to suffer wage penalties relative to workers with the same education in jobs that only require their educational level. Similarly, workers with less education than required for their jobs earn wage rewards. These departures from the Mincer human capital earnings function can be explained by Nash bargaining between workers and employers. Under fairly mild assumptions, Nash bargaining predicts a wage penalty for overeducation and a wage reward for undereducation, and further predicts that the wage penalty will exceed the wage reward. This paper reviews the established empirical regularities and then provides Nash bargaining results that explain these regularities. |
| Keywords: | overeducation, undereducation, Nash bargaining, qualitative mismatches, Mincer earnings function, wages |
| JEL: | J31 J24 C78 C51 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7025&r=hrm |
| By: | Epstein, Gil S. (Bar-Ilan University) |
| Abstract: | This paper presents a model in which promotion of employees within the internal firm hierarchy is determined by the individuals' allocation of time between promotion/rent-seeking and productive activity. We consider the effect of an increase in the employer's knowledge (information) regarding the employees' productivity levels on the total time spent by the workers in non-productive promotion-seeking activities. |
| Keywords: | promotion-seeking activities, contest, knowledge |
| JEL: | D2 D72 J2 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7023&r=hrm |
| By: | Lopes, Ana Sofia (Polytechnic Institute of Leiria); Teixeira, Paulino (University of Coimbra) |
| Abstract: | This study compares the determinants of productivity and wages at both firm and worker level. In the firm-level analysis, we follow Hellerstein, Neumark and Troske (1999) and provide improved estimates based on an extended set of covariates including the intensity of firm-provided training. In the worker-level analysis we take a new turn and generate a proxy for unobserved worker productivity. Our results point to the presence of sizeable spillover effects from schooling and training as their impact is bigger on firm-level productivity equations than on the corresponding worker-level equations. In turn, our fully disaggregated model at worker level shows that, by using all possible combinations of worker attributes, we obtain that the wage differences across different worker groups are mostly productivity based and that the gap can be as high as 33%. |
| Keywords: | worker productivity, wages, human capital, LEED |
| JEL: | C23 D24 J31 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7036&r=hrm |
| By: | Bartling, Björn (University of Zurich); Fehr, Ernst (University of Zurich); Schmidt, Klaus M. (University of Munich) |
| Abstract: | Employment contracts give a principal the authority to decide flexibly which task his agent should execute. However, there is a tradeoff, first pointed out by Simon (1951), between flexibility and employer moral hazard. An employment contract allows the principal to adjust the task quickly to the realization of the state of the world, but he may also abuse this flexibility to exploit the agent. We capture this tradeoff in an experimental design and show that principals exhibit a strong preference for the employment contract. However, selfish principals exploit agents in one-shot interactions, inducing them to resist entering into employment contracts. This resistance to employment contracts vanishes if fairness preferences in combination with reputation opportunities keep principals from abusing their power, leading to the widespread, endogenous formation of efficient long-run employment relations. Our results inform the theory of the firm by showing how behavioral forces shape an important transaction cost of integration – the abuse of authority – and by providing an empirical basis for assessing differences between the Marxian and the Coasian view of the firm, as well as Alchian and Demsetz's (1972) critique of the Coasian approach. |
| Keywords: | theory of the firm, transaction cost economics, authority, power abuse, employment relation, fairness, reputation |
| JEL: | C91 D23 D86 M5 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7029&r=hrm |
| By: | Cremer, Helmuth (Toulouse School of Economics); Pestieau, Pierre (CREPP, Université de Liège); Roeder, Kerstin (University of Munich) |
| Abstract: | This paper studies how the risk of divorce affects the human capital decisions of a young couple. We consider a setting where complete specialization (one of the spouses uses up all the education resources) is optimal with no divorce risk. Symmetry in education (both spouses receive an equal amount of education) then acts like an insurance device in case of divorce particularly when the institutions do not compensate for differences in earnings. But, at the same time symmetry in education is less efficient than the extreme specialization. This is the basic tradeoff underlying our analysis. We show that the symmetric allocation will become more attractive as the probability of divorce increases, if risk aversion is high and/or labor supply elasticity is low. However, it is only a “second-best” solution as the insurance protection is achieved at the expense of an efficiency loss. Efficiency can be restored through suitably designed marriage contracts because they can provide the appropriate insurance against divorce to a couple who opts for specialization. Finally, we study how the (economic) use of marriage is affected by the possibility of divorce. |
| Keywords: | post-marital education, marriage contract, divorce |
| JEL: | D13 J24 K36 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7038&r=hrm |
| By: | Lagakos, David; Moll, Benjamin; Porzio, Tommaso; Qian, Nancy |
| Abstract: | Using recently available large-sample micro data from 36 countries, we document that experience-earnings profiles are flatter in poor countries than in rich countries. Motivated by this fact, we conduct a development accounting exercise that allows the returns to experience to vary across countries but is otherwise standard. When the country-specific returns to experience are interpreted in such a development accounting framework -- and are therefore accounted for as part of human capital -- we find that human and physical capital differences can account for almost two thirds of the variation in cross-country income differences, as compared to less than half in previous studies. |
| Keywords: | Cross-country income; Development Accounting; Returns to Experience |
| JEL: | O11 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9253&r=hrm |
| By: | Petra Moog (University of Siegen); Arndt Werner (Institute for SME Research Bonn (IfM Bonn)); Stefan Houweling (University of Siegen); Uschi Backes-Gellner (Department of Business Administration (IBW), University of Zurich) |
| Abstract: | To date, little is known about the effects of the composition of skills on academic entrepreneurship. Therefore, in this paper, following Lazear’s (2005) jack-of-all-trades approach, we study how his or her composition of skills affects a scientist’s intention of becoming an entrepreneur. Extending Lazear, we examine how the effect of balanced entrepreneurial skills is moderated by a balanced working time allocations and peer effects. Using unique data collected from 480 life sciences researchers, we provide the first evidence that scientists with more balanced skills are more likely to have higher entrepreneurial intentions, particularly when they are in contact with entrepreneurial peers. Furthermore, we find even higher entrepreneurial intentions when balanced skill sets are combined with balanced working time allocations. Thus, to encourage the entrepreneurial intentions of life scientists, one has to ensure that they are exposed to diverse work experiences, have balanced working time allocations across different activities and work with entrepreneurial peers; i.e., collaborating with colleagues or academic scientists who have started new ventures in the past is important. |
| Keywords: | Jack-of-all-Trades, Skills, Entrepreneurial Intentions, Academic Entrepreneurship, Peer Effects, Working Time Balance |
| JEL: | O32 M13 J24 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:zrh:wpaper:325&r=hrm |
| By: | Dur, Robert (Erasmus University Rotterdam); Zoutenbier, Robin (Erasmus University Rotterdam) |
| Abstract: | A rich literature in public administration has shown that public sector employees have stronger altruistic motivations than private sector employees. Recent economic theories stress the importance of mission preferences, and predict that altruistic people sort into the public sector when they subscribe to its mission. This paper uses data from a representative survey among more than 30,000 employees from 50 countries to test this prediction. We find strong evidence for a mutually reinforcing role of altruism and mission alignment in sorting to the public sector, particularly among highly educated workers and among workers in less-developed countries. |
| Keywords: | public service motivation, altruism, mission preferences, sorting, World Values Survey |
| JEL: | H1 J45 M5 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7058&r=hrm |
| By: | Kouroche Vafaï (Université Paris Descartes - Sorbonne Cité et Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | To control, evaluate, and motivate their agents, firms employ supervisors. As shown by empirical investigations, biased evaluation by supervisors linked to collusion is a persistent feature of firms. This paper studies how deceptive supervision affects agency relationships. We consider a three-level firm where a supervisor is in charge of producing a verifiable report on an agent's output. Depending on the output he has observed, the supervisor may either collude with the agent or with the principal, and make an uniformative report. We show that the proliferation of collusive activities in firms : modifies the configuration of the optimal preventive policy, may increase the expected cost of preventing each type collusion, is beneficial to the supervisor and detrimental to the agent, and is not always harmful. |
| Keywords: | Firm, group decision, control, biased supervision. |
| JEL: | D20 D73 L20 M50 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:12084&r=hrm |
| By: | Pfeifer, Christian (Leuphana University Lüneburg); Wagner, Joachim (Leuphana University Lüneburg) |
| Abstract: | This empirical research note documents the relationship between composition of a firm's workforce (with a special focus on age and gender) and its performance with respect to innovative activities (outlays and employment in research and development (R&D)) for a large representative sample of enterprises from manufacturing industries in Germany using unique newly available data. We find that firms with a higher share of older workers have significantly lower proportions of R&D outlays in total revenues and of R&D employment in total employment, whereas firms with a higher share of female employment seem to be more active in R&D. |
| Keywords: | ageing, firm performance, gender, Germany, innovation, R&D |
| JEL: | D22 D24 J21 J24 L25 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7050&r=hrm |