nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2006‒02‒12
sixteen papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Human capital, R&D, and competition in macroeconomic analysis. By Eric Canton; Bert Minne; Ate Nieuwenhuis; Marc van der Steeg
  2. Human Capital Externalities and Growth of High- and Low-Skilled Jobs By Jens Suedekum
  3. The Risk-Return Trade-Off in Human Capital Investment By Charlotte Christiansen; Juanna Schröter Joensen; Helena Skyt Nielsen
  4. Scarcity of science and engineering students in the Netherlands. By Joëlle Noailly; Daniël Waagmeester; Bas Jacobs; Marieke Rensman; Dinand Webbink
  5. Child Labor, Urban Proximity and Household Composition By Marcel Fafchamps; Jackline Wahba
  6. Merit Aid and Sorting: The Effects of HOPE-Style Scholarships on College Ability Stratification By Christopher Cornwell; David B. Mustard
  7. Childlessness and educational attainment among Swedish women born in 1955-59 By Jan M. Hoem; Gerda R. Neyer; Gunnar Andersson
  8. Bequest Taxation, allocation of talents, education and efficiency By Stefano STAFFOLANI; Enzo VALENTINI
  9. Concentration of reproduction in Austria: general trends and differentials by educational attainment and urban-rural setting By Martin Spielauer
  10. Secondary School Track Selection of Single-Parent Children – Evidence from the German Socio-Economic Panel By Philippe Mahler; Rainer Winkelmann
  11. Single Motherhood and (Un)Equal EducationalOpportunities: Evidence for Germany By Philippe Mahler; Rainer Winkelmann
  12. Employment after childbearing: a comparative study of Italy and Norway By Magdalena Muszynska
  13. The compatibility between work and family life – an empirical study of second birth risks in West Germany and France By Katja Köppen
  14. Social segregation in secondary schools: How does England compare with other countries? By Stephen P. Jenkins; John Micklewright; Sylke V. Schnepf
  15. Does Envy Destroy Social Fundamentals? The Impact of Relative Income Position on Social Capital By Justina A.V. Fischer; Benno Torgler
  16. Performance related pay and labor productivity By Gielen,Anne C.; Kerkhofs,Marcel J.M.; Ours,Jan C. van

  1. By: Eric Canton; Bert Minne; Ate Nieuwenhuis; Marc van der Steeg
    Abstract: Long-run per capita economic growth is driven by productivity growth. Major determinants of productivity are investments in education and research, and the intensity of competition on product markets. While these ideas have been incorporated into modern growth theories and tested in empirical analyses, they have not yet found their way to applied macroeconomic models used to forecast economic developments. In this paper, we discuss various options to include human capital, R&D, and product market competition in a macroeconomic framework. We also study how policy can affect the decisions to build human capital or to perform research, and how competition policy impacts on macroeconomic outcomes. We finally sketch how these mechanisms can be implemented into the large models used at CPB.
    Keywords: Human capital; R&D; competition; applied macroeconomic mode
    JEL: O40
    Date: 2005–07
  2. By: Jens Suedekum (University of Konstanz and IZA Bonn)
    Abstract: In this paper I analyze the impact of human capital on local employment growth for the case of West Germany (1977-2002). I find robust evidence that skilled cities grow faster than unskilled ones, but this need not indicate localized human capital externalities are at work. A large initial share of high-skilled workers significantly reduces subsequent growth of highskilled jobs. The observed positive impact on total employment growth is, therefore, due to the fact that low-skilled jobs grow faster than high-skilled jobs decline in initially skilled cities. This evidence is in line with complementarities among skill groups as the major causal link between human capital and employment growth. It challenges theories of self-reinforcing spatial concentration of high-skilled workers due to strong localized spillovers.
    Keywords: human capital, local employment growth, externalities
    JEL: R11 O40
    Date: 2006–02
  3. By: Charlotte Christiansen (Aarhus School of Business); Juanna Schröter Joensen (University of Aarhus); Helena Skyt Nielsen (University of Aarhus and IZA Bonn)
    Abstract: In this paper we analyze investments in human capital assets in a way which is standard for financial assets, but not (yet) for human capital assets. We study mean-variance plots of human capital assets. We compare the properties of human capital returns using a performance measure and by using tests for mean-variance spanning. A risk-return trade-off is revealed, which is not only related to the length of education but also to the type of education. We identify a range of educations that are efficient in terms of investment goods, and a range of educations that are inefficient, and may be chosen for consumption purposes.
    Keywords: educational choice, efficient frontier, human capital investment, mean-variance analysis
    JEL: I21 J24
    Date: 2006–02
  4. By: Joëlle Noailly; Daniël Waagmeester; Bas Jacobs; Marieke Rensman; Dinand Webbink
    Abstract: Scarcity of science and engineering (S&E) graduates could potentially call for government intervention, because of the role of S&E's in R&D, and because R&D in turn is characterised by positive spillovers. In this report, we investigate whether policies that stimulate enrolment in S&E-studies are effective at increasing R&D-activity. First, we analyse the situation on the Dutch labour market for S&E graduates. We do not find evidence for scarcity of S&E graduates. Rather, the labour market position vis-à-vis other graduates weakened. A possible explanation to reconcile this conclusion with a widely felt concern of S&E shortages among employers is increasing internationalisation of the S&E labour market. Concerning policy, we argue that expanding the stock of S&E graduates is not very effective for boosting R&D activity. More than half the number of S&E graduates do not end up working in R&D. De increasing internationalisation of the S&E labour market can diminish the attractiveness of S&E courses.
    Keywords: R&D; education policy; science and engineering labour market
    JEL: O38 J31 H52
    Date: 2005–07
  5. By: Marcel Fafchamps (University of Oxford); Jackline Wahba (University of Southampton and IZA Bonn)
    Abstract: Using detailed survey data from Nepal, this paper examines the determinants of child labor with a special emphasis on urban proximity. We find that children residing in or near urban centers attend school more and work less in total but are more likely to be involved in wage work or in a small business. The larger the urban center, the stronger the effect is. Urban proximity is found to reduce the workload of children and improve school attendance up to 3 hours of travel time from the city. In areas of commercialized agriculture located 3 to 7 hours from the city, children do more farm work. Urban proximity effects are accounted for by a combination of local labor supply and demand conditions, most notably the local importance of agriculture, the education level of the parents, and the local wage rate. Child servants, which represent a small proportion of all children, work much harder than other children and appear particularly at risk.
    Keywords: child labour, Nepal, child schooling, urban proximity
    JEL: J10 J22 J24 J40 N35
    Date: 2006–02
  6. By: Christopher Cornwell (University of Georgia); David B. Mustard (University of Georgia and IZA Bonn)
    Abstract: In the last fifteen years there has been a significant increase in merit aid. Coincident with this increase in merit aid has been increased attention to sorting in various aspects of life, especially in education. This paper examines the extent to which merit-based aid exacerbates or ameliorates sorting by ability in higher education. We use panel data from Peterson’s Guide to Colleges and the Integrated Postsecondary Education Data System (IPEDS) to evaluate this relationship. Our difference-in-differences estimates show that HOPE increased the quality of entering freshmen in Georgia institutions relative to their outof- state peers. At the highest-quality institutions HOPE raised all measures of student quality and the homogeneity of students by ability. The lowest-quality institutions experienced no statistically significant effect from HOPE on any measure of student quality. We conclude that state-sponsored merit aid programs increased the retention of high ability students for college and also increased the ability stratification of institutions within states. We also examined two indirect measures of student selectivity-acceptance and yield rates. HOPE decreases acceptance rates at all types of institutions, but the percentage change is largest at the universities, which are most space constrained. HOPE increased yield rates for universities but not for any other institution categories. Together these results suggest that HOPE substantially increased the selectivity at universities.
    Keywords: education, sorting, stratification
    JEL: I2
    Date: 2006–01
  7. By: Jan M. Hoem (Max Planck Institute for Demographic Research, Rostock, Germany); Gerda R. Neyer (Max Planck Institute for Demographic Research, Rostock, Germany); Gunnar Andersson (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: In this paper, we extend the concept of educational attainment to cover the field of education attained in addition to the conventional level of education. Our empirical investigation uses register records containing childbearing and educational histories of an entire cohort of women born in Sweden (about a quarter-million individuals). This allows us to operate with a high number of educational field-and-level combinations (some sixty in all). It turns out that the field of education serves as an indicator of a woman’s potential reproductive behavior better than the mere level. We discover that in each field permanent childlessness increases (some) with the educational level attained, but that the field itself is the more important. In general, we find that women educated for jobs in teaching and health care are in a class of their own, with much lower permanent childlessness than in any other major grouping at each educational level. Women educated in arts and humanities or for religious occupations have unusually high fractions permanently childless. Our results cast doubt on the assumption that higher education per se must result in higher childlessness. In our opinion, several factors intrinsic and extrinsic to an educational system (such as its flexibility, its gender structure, and the manner in which education is hooked up to the labor market) may influence the relationship between education and childlessness, and we would not expect a simple, unidirectional relationship.
    Keywords: Sweden, education, fertility
    JEL: J1 Z0
    Date: 2005–06
  8. By: Stefano STAFFOLANI (Universita' Politecnica delle Marche, Dipartimento di Economia); Enzo VALENTINI
    Abstract: In this paper we analyze intergenerational mobility on education. After a brief empirical analysis of the influence of family background on educational attainment, we present a dynamic model where the decisions concerning education may be financially constrained. Therefore, people who get higher educational levels are not necessarily the most talented. This "misallocation effect" causes a reduction in the efficiency of the economic system. We show that a proportional bequest taxation, whose yield is redistributed among all "youths", increases efficiency.
    Keywords: bequest, education, talent allocation
    JEL: D33 I22 I30 J24
    Date: 2006–01
  9. By: Martin Spielauer (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: In this paper, we explore the inter-individual diversity in fertility among women in Austria for the female birth cohorts 1917-1961. Comparative studies revealed that all Western countries have witnessed a decline in the concentration of reproduction during the 20th century, a trend that has reversed for the most recent cohorts that have reached the end of their reproductive period. This reversal, mainly triggered by an increase in childlessness, has been far less pronounced in Austria and limited to urban municipalities. Changes in fertility and concentration have followed very different trajectories by educational attainment as well as by the type of municipality in which women lived at age 15. Within educational categories, we found large differentials by profession and intergenerational educational mobility. A consequence of the concentration of reproduction is that the level of cohort fertility differs from the average sibship size seen from the children’s perspective. In the Austrian case, in contrast to the pronounced fertility differentials by educational attainment, the average sibship size experienced by children became almost independent of parents’ education. In difference to the negative correlation between fertility and concentration found in earlier studies for the first demographic transition and the baby boom, the fertility level and concentration moved in the same direction, and did so for an extended time period following the baby boom, accelerating changes from the children’s perspective.
    Keywords: Austria, family composition, fertility trends
    JEL: J1 Z0
    Date: 2005–04
  10. By: Philippe Mahler (Socioeconomic Institute, University of Zurich); Rainer Winkelmann (Socioeconomic Institute, University of Zurich)
    Abstract: In present day Germany, one in seven children is raised in a single parent household. We investigate the effect of single parenthood on children’s educational attainment, measured by the school track at the age 14, using ordered probit models. We study whether the effect of living in single parenthood during early or late childhood differs. Finally, we ask whether the family effect operates through resources – fewer income and parental time available for the child –, or through adverse effects on psychological well-being. The data used in this study are a nationally representative sample of 14 year old children drawn from the German Socio-Economic Panel.
    Keywords: school choice, educational attainment, ordered response model
    JEL: I21 J12
    Date: 2004–09
  11. By: Philippe Mahler (Socioeconomic Institute, University of Zurich); Rainer Winkelmann (Socioeconomic Institute, University of Zurich)
    Abstract: We examine the effect of single motherhood on children’s secondary school track choice using 12-year-old children drawn from the German Socio-Economic Panel. In line with previous studies for the U.S., the U.K. and Sweden, we find a negative correlation between single motherhood and children’s educational attainment. Looking for alternative explanations for this correlation, we use probit regression models to control for factors related to single motherhood such as higher educational background, lower household income and higher labor supply of the mother. Our evidence suggests that single motherhood reduces school attainment mainly because it is associated with lower resources (household income) available for the child.
    Keywords: school choice, educational attainment, binary response model, German Socio-Economic Panel
    JEL: I21 J12
    Date: 2005–09
  12. By: Magdalena Muszynska (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: In this study we look at the circumstances under which motherhood and employment are compatible. Comparing two countries, Italy and Norway, we analyze the impact of macro factors and individual characteristics on employment decisions of first- and second-time mothers. Our results show that in Norway, where flexible forms of employment are a popular way to reconcile family life and employment, not only many women start to work when their child is small, but the fertility is also relatively high. In Italy, characterized by high rigidities of the labor market and where flexible forms of employment are hardly available, relatively few mothers enter employment and fertility is low. In addition, we found that in both countries better educated women and women with more work experience return to their jobs relatively soon after childbirth. The majority of women with a low level of education and who did not work before the childbirth do not take up work when the child is small.
    Keywords: Italy, Norway, female employment, fertility, working life
    JEL: J1 Z0
    Date: 2004–12
  13. By: Katja Köppen (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: In this study, we compare second birth risks in France and West Germany using data from the Family and Fertility Survey (FFS). Second birth risks in France are higher than in West Germany and we investigate whether this phenomenon relates to different institutional constraints regarding the compatibility between work and family life. Considering that education is a good indicator for higher career and income prospects, one would assume that highly educated women encounter low fertility rates in a society that makes it hard to combine both domains. Our results, however, show that second birth risks are higher for highly educated women than for women with lower education in both countries. Nevertheless, the positive effect of women’s education on second birth risks is strong and stable in the case of France only. In West Germany, the positive effect is a weak one and it weakens even further after controlling for the eduaction level of the partner. In France, the strong positive effect of women’s education on second birth risks remains unchanged, even after controlling for the partners’ characteristics and other control variables. Our conclusion is that since in France the compatibility between work and family life is relatively high, highly educated women turn their education into work opportunities and income. In West Germany, where work and family life are rather incompatible, women often have to make a decision between an employment career and motherhood as two exclusive life options. In such a situation, it is primarily the partners’ economic situation that influences fertility.
    Keywords: comparative analysis
    JEL: J1 Z0
    Date: 2004–05
  14. By: Stephen P. Jenkins (Institute for Social and Economic Research, University of Essex, and DIW Berlin); John Micklewright (Southampton Statistical Sciences Research Institute (S3RI) and School of Social Sciences, University of Southampton); Sylke V. Schnepf (S3RI, University of Southampton)
    Abstract: We provide new evidence about the degree of social segregation in England’s secondary schools, employing a cross-national perspective. Analysis is based on data for 27 rich industrialised countries from the 2000 and 2003 rounds of the Programme of International Student Assessment (PISA), using a number of different measures of social background and of segregation, and allowing for sampling variation in the estimates. England is shown to be a middle-ranking country, as is the USA. High segregation countries include Austria, Belgium, Germany and Hungary. Low segregation countries include the four Nordic countries and Scotland. In explaining England’s position, we argue that its segregation is mostly accounted for by unevenness in social background in the state school sector. Focusing on this sector, we show that cross-country differences in segregation are associated with the prevalence of selective choice of pupils by schools. Low-segregation countries such as those in the Nordic area and Scotland have negligible selection in schools. High segregation countries like Austria, Germany and Hungary have separate school tracks for academic and vocational schooling and, in each case, over half of this is accounted for by unevenness in social background between the different tracks rather than by differences within each track.
    Keywords: social segregation, secondary schools, England, cross-national comparison, PISA.
    JEL: D39 I21 I39
  15. By: Justina A.V. Fischer; Benno Torgler
    Abstract: Research evidence on the impact of relative income position on individual attitudes and behaviour is sorely lacking. Therefore, this paper assesses such positional impact on social capital by applying 14 different measurements to International Social Survey Programme data from 25 countries. We find support for a positional concern effect or ‘envy’ whose magnitude in several cases is quite substantial. The results indicate that such an effect is non-linear. In addition, we find an indication that absolute income level is also relevant. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.
    Keywords: Relative income position; envy; positional concerns; social capital; social norms; happiness
    JEL: Z13 H26 I31 D00 D60
    Date: 2006–01
  16. By: Gielen,Anne C.; Kerkhofs,Marcel J.M.; Ours,Jan C. van (Tilburg University, Center for Economic Research)
    Abstract: This paper uses information from a panel of Dutch firms to investigate the labor productivity effects of performance related pay (PRP). We find that PRP increases labor productivity at the firm level with about 9%.
    Keywords: performance related pay; labour productivity
    JEL: C41 H55 J64 J65
    Date: 2006

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