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on Human Capital and Human Resource Management |
| By: | Kambayashi, Ryo; Ueno, Yuko |
| Abstract: | This study aims to empirically examine how establishments employ various tools, including promotion, threat of dismissal, progressive base wages, and bonuses, to motivate workers. Starting with the standard tournament model, we incorporate the link between the tournament structure and the worker separation that affects the degree of internal competition for managerial positions. By using an establishment-level panel data set, we find that the average policy of human resource management in Japan, particularly since the global financial crisis, is consistent with tournament theory. Further, there is evidence that establishments use a positive selection scheme for determining the set of candidates. The progressive base wage schedule and the smaller portion of bonus payments for employees who remain are also consistent with the selection scheme. |
| Keywords: | Promotion tournament, internal competition, worker separation, wage progression |
| JEL: | M51 M52 J31 J63 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rcesrs:dp16-2&r=hrm |
| By: | Hasan, Iftekhar; Kobeissi, Nada; Liu, Liuling; Wang, Haizhi |
| Abstract: | This study treats firm productivity as an accumulation of productive intangibles and posits that stakeholder engagement associated with better corporate social performance helps develop such intangibles. We hypothesize that because shareholders factor improved productive efficiency into stock price, productivity mediates the relationship between corporate social and financial performance. Furthermore, we argue that key stakeholders’ social considerations are more valuable for firms with higher levels of discretionary cash and income stream uncertainty. Therefore, we hypothesize that those two contingencies moderate the mediated process of corporate social performance with financial performance. Our analysis, based on a comprehensive longitudinal dataset of U.S. manufacturing firms from 1992 to 2009, lends strong support for these hypotheses. In short, this paper uncovers a productivity-based, context-dependent mechanism underlying the relationship between corporate social performance and financial performance. |
| Keywords: | corporate social responsibility, corporate financial performance, total factor productivity, stakeholder management, discretionary cash, organizational risk |
| Date: | 2016–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2016_007&r=hrm |
| By: | Haanwinckel, Daniel (University of California, Berkeley); Soares, Rodrigo R. (Sao Paulo School of Economics) |
| Abstract: | We develop a search model of informal labor markets with worker and firm heterogeneity, intra-firm bargaining with imperfect substitutability across types of workers, and a comprehensive set of labor regulations, including minimum wage. Stylized facts associated with the informal sector, such as smaller firms and lower wages, emerge endogenously as firms and workers decide whether to comply with regulations. Imperfect substitutability across types of workers and decreasing returns to scale enable the model to reproduce empirical patterns incompatible with existing frameworks in the literature: the presence of skilled and unskilled workers in the formal and informal sectors, the rising share of skilled workers by firm size, and the declining formal wage premium by skill level. These features also allow us to analyze the equilibrium responses to changes in the demand and supply of different types of labor. We estimate the model using Brazilian data and show that it closely reproduces the decline in informality observed between 2003 and 2012. The change in the composition of the labor force appears as the main driving force behind this phenomenon. We illustrate the use of the model for policy analysis by assessing the effectiveness of a progressive payroll tax in reducing informality. |
| Keywords: | informality, labor market, search, minimum wage, compensating differentials, Brazil |
| JEL: | J24 J31 J46 J64 O17 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9951&r=hrm |
| By: | Jokivuolle, Esa; Keppo, Jussi; Yuan, Xuchuan |
| Abstract: | Regulators restrict bankers' risk-taking incentives by using a bonus cap or by extending the effective bonus accrual period. However, considering the costs of changing the bank's risk position, our model shows that extended bonus accrual periods alone do not lead to lower risk-taking. In contrast, a sufficiently tight bonus cap reduces risk-taking even when the costs of changing the bank's risk position are considered. The calibrated model indicates that a bonus cap that equals a fixed salary (as in the EU) reduces risk on average by 2%-10%, while extending bonus accrual periods is impotent. |
| Keywords: | banking, bonuses, regulation, compensation, Dodd–Frank Act |
| JEL: | G01 G21 G28 J33 M52 |
| Date: | 2016–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2015_005&r=hrm |
| By: | Krebs, Tom (University of Mannheim); Kuhn, Moritz (University of Bonn); Wright, Mark L. J. (Federal Reserve Bank of Chicago) |
| Abstract: | This paper develops a tractable human capital model with limited enforceability of contracts. The model economy is populated by a large number of long-lived, risk-averse households with homothetic preferences who can invest in risk-free physical capital and risky human capital. Households have access to a complete set of credit and insurance contracts, but their ability to use the available financial instruments is limited by the possibility of default (limited contract enforcement). We provide a convenient equilibrium characterization that facilitates the computation of recursive equilibria substantially. We use a calibrated version of the model with stochastically aging households divided into 9 age groups. Younger households have higher expected human capital returns than older households. According to the baseline calibration, for young households less than half of human capital risk is insured and the welfare losses due to the lack of insurance range from 3 percent of lifetime consumption (age 40) to 7 percent of lifetime consumption (age 23). Realistic variations in the model parameters have non-negligible effects on equilibrium insurance and welfare, but the result that young households are severely underinsured is robust to such variations. |
| Keywords: | human capital risk, limited enforcement, insurance |
| JEL: | E21 E24 D52 J24 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9948&r=hrm |
| By: | Torben M Andersen, Department of Economics and Business Economics Aarhus University, CEPR, CESifo and IZA |
| Abstract: | Income inequality is increasing in most countries at the same time as traditional redistribution policies are under pressure, not least due to strained public finances. What are the underlying causes, and what is the scope to turn the trend? This is discussed from the perspective of the link between inequality and growth running via education and human capital formation. It is argued that imperfections arising from both capital market imperfections and social barriers imply that inequality may be a barrier to education, which in turn makes inequality persistent and reduces growth. In discussing redistribution it is thus important to distinguish between the traditional passive means of redistribution via taxes and transfers to repair on the distribution of market incomes, and active means which affect the distribution of market incomes. The latter may both lead to more income equality and efficiency improvements reflected in higher incomes or income growth. Policy options to improve educational outcomes and their distribution are discussed. |
| JEL: | I24 E02 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:007&r=hrm |