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Does Higher Income Make You More Altruistic? Evidence from the Holocaust

The Review of Economics and Statistics 2011 93(3), 876-887
This paper considers the decision of Gentiles whether to rescue Jews during the Holocaust, a situation of altruistic behavior under life-or-death stakes. I examine the role to which economic factors may have influenced the decision to be a rescuer. Using cross-country data and detailed individual-level data on rescuers and nonrescuers, I find that richer countries had many more rescuers than poorer ones, and within countries, richer people were more likely to be rescuers than poorer people. The individual-level effect of income on being a rescuer remains significant after controlling for ease-of-rescue variables, such as the number of rooms in one's home, suggesting that the correlation of income and rescue is not solely driven by richer people having more resources for rescue. Given that richer people might be thought to have more to lose by rescuing, the evidence is consistent with the view that altruism increases with income.

Increasing the Demand for Workers with a Criminal Record

Quarterly Journal of Economics 2022 138(1), 103-150
We experimentally test several approaches to increasing the demand for workers with a criminal record on a nationwide staffing platform by addressing potential downside risk and productivity concerns. The staffing platform asked hiring managers to make a series of hypothetical hiring decisions that affected whether workers with a criminal record could accept their jobs in the future. We find that 39% of businesses in our sample are willing to work with individuals with a criminal record at baseline, which rises to over 50% when businesses are offered crime and safety insurance, a single performance review, or a limited background check covering just the past year. Wage subsidies can achieve similar increases but at a substantially higher cost. Based on our findings, the staffing platform relaxed the criminal background check requirement and offered crime and safety insurance to interested businesses.

People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis

Journal of Political Economy 2021 129(1), 243-285 open access
How much do a manager’s interpersonal skills with subordinates, which we call people management skills, affect employee outcomes? Are managers rewarded for having such skills? Using personnel data from a large high-tech firm, we show that survey-measured people management skills have a strong negative relation to employee turnover. A causal interpretation is reinforced by several research designs, including those exploiting new workers joining the firm and workers switching managers. However, people management skills do not consistently improve most observed nonattrition outcomes. Better people managers themselves receive higher subjective performance ratings, higher promotion rates, and larger salary increases.

Discretion in Hiring*

Quarterly Journal of Economics 2018 133(2), 765-800 open access
Please do not cite or circulate without permission This paper examines whether and how firms should adopt job testing technologies. If hiring managers have other sources of information about a worker’s quality (e.g. interviews), then firms may want to allow managers to overrule test recommendations for candidates they believe show promise. Yet if firms are concerned that managers are biased or have misaligned objectives, it may be optimal to impose hiring rules even if this means ignoring potentially valuable soft information. We evaluate the staggered introduction of a job test across 130 locations of 15 firms employing service sector workers. We show that testing improves the match-quality of hired workers, as measured by their completed tenure, by about 14%. These gains largely come from managers who follow test recommendations, as opposed to those who frequently make exceptions to test recommendations. That is, when faced with similar applicant pools, managers who make more exceptions systematically end up with workers with lower tenure. In this setting, our results suggest that firms can improve productivity by taking advantage of the verifiability of test scores to limit managerial discretion. 1 1

The Value of Hiring through Employee Referrals *

Quarterly Journal of Economics 2015 130(2), 805-839
Using personnel data from nine large firms in three industries (call centers, trucking, and high-tech), we empirically assess the benefit to firms of hiring through employee referrals. Compared to nonreferred applicants, referred applicants are more likely to be hired and more likely to accept offers, even though referrals and nonreferrals have similar skill characteristics. Referred workers tend to have similar productivity compared to nonreferred workers on most measures, but referred workers have lower accident rates in trucking and produce more patents in high-tech. Referred workers are substantially less likely to quit and earn slightly higher wages than nonreferred workers. In call centers and trucking, the two industries for which we can calculate worker-level profits, referred workers yield substantially higher profits per worker than nonreferred workers. These profit differences are driven by lower turnover and lower recruiting costs for referrals.

What Do Employee Referral Programs Do? Measuring the Direct and Overall Effects of a Management Practice

Journal of Political Economy 2023 131(3), 633-686
Employee referral programs (ERPs) are randomly introduced in a grocery chain. On direct effects, larger referral bonuses increase referral quantity but decrease quality, though the increase in referrals from ERPs is modest. However, the overall effect of having an ERP is substantial, reducing attrition by 15% and significantly decreasing labor costs. This occurs, partly, because referrals stay longer than nonreferrals, but, mainly, from indirect effects: nonreferrals stay longer in treated than in control stores. The most supported mechanism for these indirect effects is workers value being involved in hiring. Attrition impacts are larger in higher performing stores and better local labor markets.