Age-Biased Technological and Organizational Change: Firm-Level Evidence and Management Implications

This paper examines the question, whether the growing use of new technologies and decentralized forms of work organization affects the age structure of workforces within firms. The initial idea behind this relationship is that technological and organizational change may not only be skill-biased, but also age-biased. Based on human capital theoretical explanations that mainly focus on skill obsolescence in association with the need to acquire new skills, the hypothesis of an age-biased technological and organizational change (ABTOC) is derived and tested econometrically using German firm-level data. The empirical results show that the adoption of technological and organizational innovations decreases the firms’ demand for older workers and increases the demand for younger workers. Hence, ABTOC is found to be at the expense of older workers. Since ABTOC does not fit to the current development in terms of age-specific labor supply, this paper also suggests human resource management practices that encourage firms to combine the use of new technologies and organizational forms with an ageing workforce.Ageing workforces, new technologies, decentralized work organization, skill obsolescence, skill adaptation, productivity-wage-differentials

Trust-Based Working Time and Organizational Performance: Evidence from German Establishment-Level Panel Data

This paper empirically examines the impact of trust-based working time on firm performance using panel data from German establishments. Trust-based working time is a human resource management practice that involves a high degree of worker autonomy in terms of scheduling individual working time. From the theoretical viewpoint, trust-based working time may affect worker motivation positively as well as negatively. Therefore, at the establishment level the performance effects of trust-based working time remain an open question. The analysis shows that both establishment productivity and profitability increase with the diffusion of trust-based working time. Referring only to establishments with trust-based working time arrangements, both performance effects are estimated at about 1-2 percent, while in the full sample both per- formance effects are stronger ranging between about 2.5 and 5 percent.Trust-based working time, working time flexibility, firm performance

Temporary Agency Work and Firm Performance: Evidence from German Establishment-Level Panel Data

This paper empirically examines the impact of temporary agency work on firm performance using panel data from German establishments. Thereby, special attention is devoted to the question, whether there are performance differences between firms using temporary agency workers (TAWs) as a buffer stock (flexibility strategy) and firms using TAWs for screening purposes (screening strategy). While the theoretical discussion on this issue does not lead to clear-cut results, our empirical investigation provides the following results. First, we find an inverse U-shaped relationship between the share of TAWs and firm performance. Second, we obtain that firms following the screening strategy are significantly more productive than firms following the flexibility strategy. These results are found to be valid in both cross-sectional and panel data settings, so they are robust to unobserved firm heterogeneity.Temporary agency work, firm performance, flexibility strategy, screening strategy

Fixed-term Employment, Work Organization and Job Satisfaction: Evidence from German Individual-Level Data.

The present paper examines the joint effect of fixed-term employment and work organization on job satisfaction using individual-level data from the German Socio-Economic Panel GSOEP). Specifically, we analyze whether workers who are heterogeneous in terms of the type of working contract (fixed-term vs. permanent) do also differ with regard to job satisfaction, when they perform under comparable work organizational conditions. Such information would be quite valuable for employers, because they can learn about the responsiveness of heterogeneous workers to innovative work organizational practices. For this purpose, we at first estimate a linear fixed effects model, thereby controlling for unobserved time-constant characteristics. In a second step, we account for potential remaining endogeneity by combining the fixed effects approach with a two-stage estimation strategy. Our empirical results show that in terms of job satisfaction fixed-term workers and their permanent counterparts respond differently to a number of organizational practices including task diversity, employee involvement, social relations at work, general working conditions, and career prospects. The results may be used by employers to improve their concept of diversity management and specifically the job design of heterogeneous workers.

Complementarities between Workplace Organisation and Human Resource Management:

Owing to changes in the business environment, there has been a tremendous adoption of innovative workplace organisation (WO) and human resource (HR) practices during the last few decades. Assuming a holistic perspective on human resource management (HRM), the present study establishes the hypothesis of mutually reinforcing WO and HR practices that, thus, constitute a so-called high-performance work system. Precisely, it is argued that there may be a complementary relationship between a more decentralised way of allocating tasks and decision rights on the one hand and continuing training (or skilled labour), incentive pay or a more intensive use of long-term, as opposed to temporary, employment on the other. This hypothesis is examined empirically using latest nationally representative panel data of about 2,500 firms in Switzerland and applying econometric estimation techniques on the basis of an augmented Cobb-Douglas production function. The estimation results show statistically significant complementarities between the WO and HR practices mentioned above. In addition, socalled innovative HRM systems of mutually reinforcing WO and HR practices increase firm performance significantly. These results are robust to unobserved firm heterogeneity and to the problem of reversed causality.

Business environment, managerial strategies, and the allocation of decision-making authorities in Swiss Firms

The allocation of decision-making authorities may be seen as the last link in a causal relationship starting from changes in environment and continuing to business strategy. Changes in task complexity, which can be measured by the introduction of a diversica- tion or an outsourcing strategy, are expected to result in a shift towards a more centralized or decentralized allocation of decision-making authorities. Using nationally representative Swiss rm data, OLS, Propensity Score Matching as well as a combined matching and dierence-in-dierences approach in order to account for endogeneity and unobserved het- erogeneity are applied. Estimates using all three approaches show a highly signicant positive impact of outsourcing on a decentralized decision rights assignment, whereas a diversication strategy yields no in uence. The conclusion therefore is that a lower delega- tion risk due to a decline in complexity results in decentralized decision-making authorities in Swiss rms.Allocation of decision-making authorities - Diversication - Outsourcing - Average treatment eect - Propensity score matching estimators - Combined matching dierence-in-dierences estimator

How Stable Are Monetary Models of the Dollar-Euro Exchange Rate? - A Time-varying Coefficient Approach

This paper examines the significance of different fundamental regimes by applying various monetary models of the exchange rate to one of the politically most important exchange rates, the exchange rate of the US dollar vis-à-vis the euro (the DM). We use monthly data from 1975:01 to 2007:12. Applying a novel time-varying coefficient estimation approach, we come up with interesting properties of our empirical models. First, there is no stable long-run equilibrium relationship among fundamentals and exchange rates since the breakdown of BrettonWoods. Second, there are no recurring regimes, i.e. across different regimes either the coefficient values for the same fundamentals differ or the significance differs. Third, there is no regime in which no fundamentals enter. Fourth, the deviations resulting from the stepwise cointegrating relationship act as a significant error-correction mechanism. In other words, we are able to show that fundamentals play an important role in determining the exchange rate although their impact differs significantly across different subperiods.Structural exchange rate models, cointegration, structural breaks, switching regression, time-varying coefficient approach

Self-managed working time and firm performance: Microeconometric evidence

This paper empirically examines the impact of self-managed working time (SMWT) on firm per-formance using panel data from German establishments. As a policy for the decentralization of decision rights, SMWT provides employees with extensive control over scheduling individual working time. From a theoretical viewpoint, SMWT has ambiguous effects on both worker productivity and wages. Based on the construction of a quasi-natural experiment and the combination of a differences-in-differences approach with propensity score matching as an identification strategy, the empirical analysis shows that up to five years after introduction, SMWT increases firm productivity by about 9% and wage costs by about 8.5%. This implies that SMWT improves both individual and firm productivity, and supplemental evidence shows that these productivity enhancements can primarily be explained by incentive effects associated with decentralization policies in general

The Returns to Continuous Training in Germany: New Evidence from Propensity Score Matching Estimators

The present paper examines the wage effects of continuous training programs using individual-level data from the German Socio Economic Panel (GSOEP). In order to account for selectivity in training participation we estimate average treatment effects (ATE and ATT) of general and firm-specific continuous training programs using several state-of-the-art propensity score matching (PSM) estimators. Additionally, we also apply a combined matching difference-indifferences (MDiD) estimator to account for unobserved individual characteristics (e.g. motivation, ability). While the estimated ATE and ATT for general training are significant ranging between about 4 and 7.5 %, the corresponding wage effects of firm-specific training are mostly insignificant. Using the more appropriate MDiD estimator, however, we find a more precise and highly significant wage effect of about 5 to 6 %, though only for general training and not for firm-specific training. These results are consistent with standard human capital theory insofar as general training is associated with larger wage increases than firm-specific training. Furthermore, we conclude that firms may intend to use specific training to adjust to new job requirements, while career-relevant changes may be conditioned to general training. --Continuous training,wage effect,average treatment effect,selectivity bias,propensity score matching estimators