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Insider econometrics: A roadmap with stops along the way

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  • Shaw, Kathryn

Abstract

For the past twenty five years, economists have been building theories of the optimal management of firms. For example, economic models suggest that under some conditions, piece rate pay raises performance, and under other conditions, promotions tournaments raise performance. Some of these theories have been tested, others have not. Economists are now using new empirical research tools, that we label "insider econometrics," to test the impact of management practices on productivity: to model how much productivity changes; to model why management practices raise productivity; and to examine which firms benefit and why from alternative management practices. The methodology we describe is "insider" because it uses inside knowledge and data from within firms. It is "econometrics" because the methodology is often the application of treatment effects methods to modeling changing management practices within firms. However, the methods and challenges of insider econometrics are unique, and we identify several key features that are important in undertaking empirical studies of workers' productivity. Now that more firms are keeping data on employees, it is time to improve our analysis of the empirical study of the productivity of workers within firms.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 16 (2009)
Issue (Month): 6 (December)
Pages: 607-617

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Handle: RePEc:eee:labeco:v:16:y:2009:i:6:p:607-617

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Personnel economics Incentive pay Productivity Human capital;

References

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Cited by:
  1. Alex Bryson & Petri Böckerman & Pekka Ilmakunnas, 2011. "Does High Involvement Management Improve Worker Wellbeing?," CEP Discussion Papers dp1095, Centre for Economic Performance, LSE.
  2. Van Reenen, John, 2011. "Wage inequality, technology and trade: 21st century evidence," Labour Economics, Elsevier, vol. 18(6), pages 730-741.
  3. Sanghamitra Das & Kala M. Krishna & Sergey Lychagin & Rohini Somanathan, 2011. "Lifting the Veil: The Face of TFP in an Indian Rail Mill," CESifo Working Paper Series 3515, CESifo Group Munich.
  4. Kubo, Katsuyuki & Saito, Takuji, 2012. "The effect of mergers on employment and wages: Evidence from Japan," Journal of the Japanese and International Economies, Elsevier, vol. 26(2), pages 263-284.

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