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on Human Capital and Human Resource Management |
| By: | Boza, István (Centre for Economic and Regional Studies); Reizer, Balázs (Corvinus University of Budapest) |
| Abstract: | A main driver of the gender wage gap is that women earn a lower firm-specific wage premium than men. We document the role of flexible wage components in driving both within-firm and between-firm gender differences in firm premia. For this purpose, we link wage survey data on performance payments and overtime to an administrative linked employer-employee dataset from Hungary. We find that the gender gap in firm premia is negligible at firms that do not pay either performance payments or overtime, while it is more than 11 percent at firms where all employees receive performance- and overtime payments. These patterns are also present when we control for differences in the labor productivity of firms or after composition differences are accounted for using AKM models. Finally, a decomposition exercise shows that performance payments and overtime payments contribute 60 percent to the gender gap in firm premia and 25 percent to the overall gender gap. |
| Keywords: | wage inequality, bargaining, sorting, overtime, performance payments |
| JEL: | J31 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17125 |
| By: | Weidmann, Ben (Harvard Kennedy School); Vecci, Joseph (University of Gothenburg); Said, Farah (Lahore School of Economics); Deming, David (Harvard University); Bhalotra, Sonia R. (University of Warwick) |
| Abstract: | This paper develops a novel method to identify the causal contribution of managers to team performance. The method requires repeated random assignment of managers to multiple teams and controls for individuals' skills. A good manager is someone who consistently causes their team to produce more than the sum of their parts. Good managers have roughly twice the impact on team performance as good workers. People who nominate themselves to be in charge perform worse than managers appointed by lottery, in part because self-promoted managers are overconfident, especially about their social skills. Managerial performance is positively predicted by economic decision-making skill and fluid intelligence – but not gender, age, or ethnicity. Selecting managers on skills rather than demographics or preferences for leadership could substantially increase organizational productivity. |
| Keywords: | teamwork, managers, skills, measurement, experiment |
| JEL: | M54 J24 C90 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17165 |
| By: | Agnes Norris Keiller; Tim Obermeier; Andreas Teichgraeber; John Van Reenen |
| 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. |
| JEL: | L1 L6 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32695 |
| By: | Seungho Choi; Ross Levine; Raphael Park; Simon Xu |
| Abstract: | Although corporate finance theory suggests how adverse shocks influence shareholder preferences toward corporate risk-taking and executive compensation, few researchers explore this relationship empirically. We construct a firm-year measure of unexpected shocks to environmental regulatory stringency. We find that adverse environmental regulatory shocks typically prompt corporate boards to reduce the risk-taking incentives of CEO compensation. However, this pattern is not uniform. Financially distressed firms exhibit milder reductions in compensation convexity, with some even increasing it, suggesting a “gambling for resurrection” strategy. Moreover, the strength of corporate governance influences shareholders’ capacity to align executive incentives with changing shareholder risk preferences. |
| JEL: | G34 G38 M52 Q53 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32663 |
| By: | Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw; Institute of Labor Economics (IZA); University of Warsaw; Group for Research in Applied Economics (GRAPE)); Katarzyna Bech - Wysocka (Group for Research in Applied Economics (GRAPE); Warsaw School of Economics) |
| Abstract: | We study the effects of gender board diversity on firm performance. We use novel and rich firm-level data covering over seven million private and public firms spanning the years 1995- 2020 in Europe. We augment a standard TFP estimation with firm fixed effects to explore the role of gender board diversity. We construct a shift-share instrument for gender board diversity and find that increasing the share of women on boards is conducive to better economic performance. The results prove robust to a variety of sensitivity analysis. This outcome is driven primarily by firms from the service sector and by smaller firms. The impact was stronger during the early years of our sample. |
| Keywords: | firm performance, gender board diversity |
| JEL: | J16 J88 D22 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fme:wpaper:95 |