Discussion Paper No. 490
January 15, 2024
Workplace Connections and Labor Migration: The Role of Information in Shaping Expectations
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Abstract:
In a context where improved employment outcomes entail relocating to a new destination, how does information from former coworkers alter workers’ labor migration decisions? We explore this question using the unique backdrop of German reunification in the early 1990s. For former workers of the German Democratic Republic (GDR), improving employment outcomes typically meant relocating to West Germany, which most were reluctant to do. We show that information from former GDR coworkers in West Germany significantly increased the employment probability of East Germans in West Germany. To identify these network effects, we document and exploit that GDR workers were as-good-as randomly assigned to networks by the GDR system from the perspective of the West German market economy. We then establish that the networks only trigger migration responses among East Germans whose contacts had positive work experiences in the West and were similar in their earnings potential in the market-based economy of reunified Germany. These contacts, in essence, serve as role models for the workers’ prospects in the West, leading workers to trust the advice and assessments provided and ultimately altering the expected benefits from labor migration for the specific worker.
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Discussion Paper No. 489
December 29, 2023
How to Increase Public Support for Carbon Pricing
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The public acceptability of a carbon price depends on how the revenues from carbon pricing are used. In a fully incentivised experiment with a large representative sample of the German population, we compare five different revenue recycling schemes and show that support for a carbon price is maximised by a “Climate Premium” that pays a fixed, uniform, upfront payment to each person. This recycling scheme receives more support than tax and dividend schemes, than using revenues for the general budget of the government, and than earmarking revenues for environmental projects. Furthermore, we show that participants and experts underestimate the public support for carbon pricing.
Keywords:
carbon pricing; pigovian taxation; political support for carbon taxes; survey experiments;
JEL-Classification:
H23; P18; C9; D9;
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Discussion Paper No. 488
December 20, 2023
Automatability of Occupations, Workers' Labor-market Expectations, and Willingness to Train
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We study how beliefs about the automatability of workers' occupation affect labor-market expectations and willingness to participate in further training. In our representative online survey, respondents on average underestimate the automation risk of their occupation, especially those in high-automatability occupations. Randomized information about their occupations’ automatability increases respondents’ concerns about their professional future, and expectations about future changes in their work environment. The information also increases willingness to participate in further training, especially among respondents in highly automatable occupation (+five percentage points). This uptick substantially narrows the gap in willingness to train between those in high- and low-automatability occupations.
Keywords:
automation; further training; labor-market expectations; survey experiment; information;
JEL-Classification:
J24; O33; I29; D83;
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Discussion Paper No. 487
More than Joints: Multi-Substance Use, Choice Limitations, and Policy Implications
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As illicit substances move into the legal product space, substitution patterns with legal products become more salient. In particular, marijuana legalization may have implications for the use of other legal “sin” goods. We estimate a structural model of multi-product use of illegal and legal substances considering joint use, limited access to illicit products, and persistence in use. We focus on a young person’s choice to consume marijuana, alcohol or cigarettes (and possible combinations), and we find that sin goods are complements. Furthermore, our findings emphasize the necessity of accounting for joint consumption and access to obtain correct price sensitivity estimates. Post-legalization, youth marijuana use would increase from 25% to 37%. However, counterfactual results show that a combination of (reasonable) tax increases on all goods along with enforcement against illegal use can potentially revert use to pre-legalization levels. The earlier the tax increases are implemented the more effective they are at curbing future use. Our results inform the policy debate regarding the impact of marijuana legalization on the long-term use of sin goods.
Keywords:
complementarity, marijuana legalization, limited choice sets, data restrictions, discrete choice models; marijuana legalization; limited choice sets; data restrictions; discrete choice models;
JEL-Classification:
C11; D12; L15; K42; H02; L66; C35;
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Discussion Paper No. 486
Self-control and Performance while Working from Home
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This study explores the role of trait self-control in individuals’ changes in performance and well-being when working from home (WFH). In a three-wave longitudinal study with UK workers in the midst of the COVID-19 pandemic, we find that low self-control workers experienced a significant positive adjustment to WFH over time: The number of reported work distractions decreased, and self-assessed performance increased over the period of four months. In contrast, high self-control individuals did not show a similar upward trajectory. Despite the positive adjustment of low self-control individuals over time, on average, self-control was still positively associated with performance and negatively associated with work distractions. However, trait self-control was not consistently associated with changes in well-being. These findings provide a more nuanced view on trait self-control, suggesting that low self-control individuals can improve initial performance over time when working from home.
Keywords:
self-control; working from home; productivity;
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Discussion Paper No. 485
Use of Digital Technologies for HR Management in Germany: Survey Evidence
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Using a survey with 57 German firms, we evaluate the level of digitalization of the human resource management (HRM) function and document perceived benefits and barriers of technology adoption from organizational and individual users’ perspectives. The results give reason for optimism. Most of the companies report that the core HR processes are digitized. We do not observe adverse effects of the digital HRM tools on users’ job satisfaction and work stress. Still, more than half of companies do not yet use digital tools for strategic HRM decisions. Respondents appreciate the increased speed and cost-efficiency of digital HR processes and associate them with a competitive advantage in talent acquisition. The most prominent barriers to adoption are lack of qualified professionals, high costs, and uncertainty regarding the legal framework. Additionally, we test whether small and medium-sized enterprises differ systematically from larger organizations in how they use digital HRM tools.
Keywords:
digital HRM tools; human resource management; digitalization; Germany;
JEL-Classification:
M12; M15; M50; O33; O52;
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Discussion Paper No. 484
Minority Protection in Voting Mechanisms – Experimental Evidence
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Under simple majority voting an absolute majority of voters may choose policies that are harmful to minorities. It is the purpose of sub- and super-majority rules to protect legitimate minority interests. We study how voting rules are chosen under the veil of ignorance and whether there are systematic biases in these choices. In our experiment, individuals choose voting rules for given distributions of gains and losses that can arise from a policy, but before learning their own valuation of the policy. We find that subjects on average adjust the voting rule in line with the skewness of the distribution. As a result, a higher share of the achievable surplus can be extracted with the suggested rules than with exogenously given simple majority voting. While the rule choices are not significantly biased towards under- or overprotection of the minority, towards majority voting or towards status-quo preserving rules, they only imperfectly reflect the distributions of benefits and costs. In expectation this leads to only 63% of the surplus being extracted. The participants are heterogeneous with respect to how well their rule choices adapt to the distribution of valuations, with a large share of the surplus loss caused by a small group of participants.
Keywords:
minority protection; voting; experiments;
JEL-Classification:
D72; C91;
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Discussion Paper No. 483
Are Women in Science Less Ambitious than Men? Experimental Evidence on the Role of Gender and STEM in Promotion Applications
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Abstract:
The gender wage gap is to a significant extent driven by gender-based job segregation. One of the potential culprits can be found in supply-side behavioral differences in promotion applications. In this study, using a controlled lab experiment, we disentangle the roles of gender, field of study, and task difficulty in promotion application decisions. Our study pro- vides three crucial findings. First, gender differences in self-limiting promotion application behavior are only present in STEM field students when exposed to a male task. Specifi- cally, when an easier alternative is available, women are less willing to apply for promotions concerning harder tasks than men. Second, there exists no significant difference between men’s and women’s willingness to apply for promotion concerning female jobs in STEM or non-STEM fields. Third, we find that previously reported gender differences in confidence are present only between STEM field students. The results also suggest that self-sorting into positions does not cause a decrease in overall welfare, however, it causes fewer promotions for women in STEM. We finally propose an easy-to-implement policy intervention to close the gender gap in STEM students when applying for a promotion.
Keywords:
gender differences; promotion application; self-limiting behavior; hierarchical segregation; STEM; male task; experiment;
JEL-Classification:
D91; J16; J62; C91;
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Discussion Paper No. 482
December 15, 2023
When Zeros Count: Confounding in Preference Heterogeneity and Attribute Non-attendance
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Identifying consumer heterogeneity is a central topic in marketing. While the main focus has been on developing models and estimation procedures that allow uncovering consumer heterogeneity in preferences, a new stream of literature has focused on models that account for consumers’ heterogeneous attribute information usage. These models acknowledge that consumers may ignore subsets of attributes when making decisions, also commonly termed “attribute nonattendance" (ANA). In this paper, we explore the performance of choice models that explicitly account for ANA across ten different applications, which vary in terms of the choice context, the associated financial risk, and the complexity of the purchase decision. We systematically compare five different models that either neglect ANA and preference heterogeneity, account only for one at a time, or account for both across these applications. First, we showcase that ANA occurs across all ten applications. It prevails even in simple settings and high-stakes decisions. Second, we contribute by examining the direction and the magnitude of biases in parameters. We find that the location of zero with regard to the preference distribution affects the expected direction of biases in preference heterogeneity (i.e., variance) parameters. Neglecting ANA when the preference distribution is away from zero, often related to whether the attribute enables vertical differentiation of products, may lead to an overestimation of preference heterogeneity. In contrast, neglecting ANA when the preference distribution spreads on both sides of zero, often related to attributes enabling horizontal differentiation, may lead to an underestimation of preference heterogeneity. Lastly, we present how the empirical results translate into managerial implications and provide guidance to practitioners on when these models are beneficial.
Keywords:
choice modeling; preference heterogeneity; attribute non-attendance; inattention;
JEL-Classification:
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Discussion Paper No. 481
Mapping the Dynamics of Management Styles— Evidence from German Survey Data
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We study how firms adjust the bundles of management practices they adopt over time, using repeated survey data collected in Germany from 2012 to 2018. By employing unsupervised machine learning, we leverage high-dimensional data on human resource policies to describe clusters of management practices (management styles). Our results suggest that two management styles exist, one of which employs many and highly structured practices, while the other lacks these practices but retains training measures. We document sizeable differences in styles across German firms, which can (only) partially be explained by firm characteristics. Further, we show that management is highly persistent over time, in part because newly adopted practices are discontinued after a short time. We suggest miscalculations of cots-benefit trade-offs and non-fitting corporate culture as potential hindrances of adopting structured management. In light of previous findings that structured management increases firm performance, our findings have important policy implications since they show that firms which are managed in an unstructured way fail to catch up and will continue to underperform.
Keywords:
management practices; personnel management; panel data analysis; machine learning;
JEL-Classification:
M12; D22; C38;