nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2006‒03‒18
eleven papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Simulating the Lisbon skills targets in WorldScan By Bas Jacobs
  2. Does training benefit those who do not get any? Elasticities of complementarity and factor price in South Africa By Alberto Behar
  3. Job Search in Thick Markets: Evidence from Italy By Sabrina Di Addario
  4. Skill Transferability, Regret and Mobility By Lex Borghans; Bart H.H. Golsteyn
  5. Reasons for Wage Rigidity in Germany By Wolfgang Franz; Friedhelm Pfeiffer
  6. Do Peers Affect Student Achievement in China's Secondary Schools? By Weili Ding; Steven Lehrer
  7. Why should governments intervene in education, and how effective is education policy By Marc van der Steeg
  8. Part-time Work - A Trap for Women`s Careers? An Analysis of the Roles of Heterogeneity and State Dependence By Mary Gregory; Sara Connolly
  9. Earnings Inequality in India: Has the Rise of Caste and Religion Based Politics in India Had an Impact? By Sumon Kumar Bhaumik; Manisha Chakrabarty
  10. Renascent Entrepreneurship - Entrepreneurial Preferences Subsequent to Firm Exit By Erik Stam; David Audretsch; Joris Meijaard
  11. The Impact of Poor Health on Education: New Evidence Using Genetic Markers By Weili Ding; Steven Lehrer; J. Niles Rosenquist; Janet Audrain-McGovern

  1. By: Bas Jacobs
    Abstract: This paper explains the theoretical background, the analytical methods, calibrations, assumptions and computations of the skill inputs for the WorldScan analysis on the skills targets of the Lisbon agenda. The Lisbon skills targets are implemented in WorldScan using most recent theoretical and empirical research in human capital theory. In particular, a satellite model for WorldScan is developed which disaggregates high skilled labour in S&E and non-S&E workers, and low skilled labour in workers with primary education (or less), lower secondary education, and higher secondary levels of education. In addition, workers can acquire skills through on-the-job training. The quality of the workforce may also increase by a higher quality of initial education. Finally, a stylised cohort model is developed to capture the time-lag between changes in policies and the eventual impact on the labour force. In implementing the skills targets we take heterogeneity between various EU countries into account with respect to the following skill variables: initial average levels of education, the returns to education, graduation rates in upper-secondary education, participation in on-the-job training, and the graduation shares in S&E education.
    Keywords: human capital; training; education; literacy; labor markets; Lisbon agreement; general equilibrium modeling
    JEL: D50 H50 I20 J20 J30
    Date: 2005–12
  2. By: Alberto Behar
    Abstract: Commentators claim that a shortage of skills in South Africa is constraining output and that a rise in skill supply would benefit less skilled occupations. This assumes or implies skilled and unskilled labour are complements. Hicks Elasticities of Complementarity and elasticities of factor price are estimated between capital and five occupations. The results show that skilled/artisanal and unskilled labour are complements while semi-skilled and unskilled labour are substitutes. These results allow for imperfectly elastic product demand, rigid wages and inference on highly non-linear elasticities. Aggregated estimates suggest More skilled labour complements Less skilled labour.
    Keywords: Hicks Elasticity of Complementarity, South Africa, Training, Skill
    JEL: J23 J31
    Date: 2005
  3. By: Sabrina Di Addario
    Abstract: I analyze empirically the effects of both urban and industrial agglomeration on men`s and women`s search behavior and on the efficiency of matching. The analysis is based on the Italian Labor Force Survey micro-data, which covers 520 randomly drawn Local Labor Market Areas (66 per cent of the total) over the four quarters of 2002. I compute transition probabilities from non-employment to employment by jointly estimating the probability of searching and the probability of finding a job conditional on having searched, and I test whether these are affected by urbanization, industry localization, labor pooling and family network quality. In general, the main results indicate that urbanization and labor pooling raise job seekers` chances of finding employment (conditional on having searched), while industry localization and family network quality increase only men`s. Moreover, neither urban nor industrial agglomeration affect non-employed indvidiual`s search behavior; although men with thicker family networks search more intensively.
    Keywords: Labour Market Transitions, Search Intensity, Urbanization, Industrial Localization
    JEL: J64 R00 J60
    Date: 2005
  4. By: Lex Borghans (ROA, Maastricht University and IZA Bonn); Bart H.H. Golsteyn (ROA, Maastricht University)
    Abstract: After graduation many students start working in sectors not related to their field of study or participate in training targeted at work in other sectors. In this paper, we look at mobility immediately after graduation from the perspective that educational choices have been made when these pupils had little experience of the actual working life in these professions. We develop a model where students accumulate partially transferable human capital but also learn about their professional preferences at the university and during the first years in the labor market. As a consequence of this newly acquired insight, these young workers might realize that working in another occupational field would better fit their preferences, although they are better equipped to work in their own field. The empirical analysis reveals that if wages are 1% lower due to lower skill transferability, the probability that a graduate who regrets his choice actually switches decreases by 2.2 percentage points, while those who switch on average take 0.3 months additional education.
    Keywords: regret, mobility, skill transfer, training
    JEL: J24 J44 J62
    Date: 2006–03
  5. By: Wolfgang Franz (ZEW and University of Mannheim); Friedhelm Pfeiffer (ZEW, University of Mannheim and IZA Bonn)
    Abstract: This study investigates institutional and economic reasons for downward wage rigidity regarding three occupational skill groups. Based on a survey of 801 firms in Germany and an econometric analysis, we find strong support for explanations based on the effects of labour union contracts and efficiency wages that differ between skill groups. Survey respondents indicate that labour union contracts and implicit contracts are important reasons for wage rigidity for the (less) skilled. Specific human capital and negative signals for new hires are causes of the stickiness of wages for the highly skilled. Compared with US evidence, German firms seem to attach more importance to labour union contracts and specific human capital.
    Keywords: wage rigidity, labour union contracts, efficiency wage theory, implicit contract theory, regulation of labour
    JEL: J41 J51 K31
    Date: 2006–03
  6. By: Weili Ding (Queen's University); Steven Lehrer (Queen's University)
    Abstract: Peer effects have figured prominently in debates on school vouchers, desegregation, ability tracking and anti-poverty programs. Compelling evidence of their existence remains scarce for plaguing endogeneity issues such as selection bias and the reflection problem. This paper is among the first to firmly establish the link between peer performance and student achievement, using a unique dataset from China. We find strong evidence that peer effects exist and operate in a positive and nonlinear manner; reducing the variation of peer performance increases achievement; and our semi-parametric estimates clarify the tradeoffs facing policymakers in exploiting positive peers effects to increase future achievement.
    Keywords: Peer Effects, Ability Grouping, Selection on observables, China, Academic performance, Teacher quality
    JEL: I2 Z13 P36
    Date: 2005–02
  7. By: Marc van der Steeg
    Abstract: This paper reviews arguments for government interference in the education sector and discusses the effectiveness of commonly used policy instruments. There are both efficiency and equity reasons for government intervention. Particular attention is paid to education spillovers (an efficiency motive). The empirical literature shows that there is little reason to argue for additional policy efforts to correct for externalities. There is some promising evidence, however, for non-pecuniary spillovers in the form of crime reduction and health improvements. With regard to the effectiveness of policy instruments, the paper discusses studies with a (quasi-)experimental design so that the causal impact of the policy can be identified. Early childhood interventions appear to be more effective than interventions in later stages of the education cycle.
    Keywords: private and social returns to education; education and equity; education policy; controlled and social policy experiments
    JEL: I20 I28 H23 H52
    Date: 2005–07
  8. By: Mary Gregory; Sara Connolly
    Abstract: Part-time work has been a major area of employment growth for women in the UK over recent decades. Almost half the women in employment now work part-time and two-thirds have worked part-time for some part of their working lives. Part-time employment is welcomed by many women as a means of maintaining labour market participation particularly during the childcare years. However many part-time jobs are low paid and offer little opportunity for career advancement. This leads to conflicting views of the role of part-time work: allowing a full-time career to be maintained or as a dead-end trap for women`s careers. This paper examines this issue using cohort data which follows women`s labour market involvement up to age 42. The pathways followed through full-time employment, part-time employment and non-employment are found to be complex and highly varied. Using several estimation methods (pooled multinomial logits, dynamic random effects binary choice logits and selection-corrected random effects probits) on a 20-year panel we examine the relative roles of heterogeneity in characteristics and state dependence in explaining the choice of labour market state. Our major finding is that a woman`s labour market history reveals itself as the major determinant of subsequent labour market state, dominating the role of characteristics. Part-time work serves two different functions. Women whose past history involves full-time work even in conjunction with spells of part-time work or non-employment, revert to full-time work. Women whose labour market history combines spells in part-time work with non-employment are unlikely subsequently to take up full-time work.
    Keywords: Female Employment, Part-time Work, Persistence, Life-cycle, Dynamic Panel, Discrete Choice
    JEL: C23 C25 C33 C35 J16 J22 J62
    Date: 2005
  9. By: Sumon Kumar Bhaumik (Brunel University and IZA Bonn); Manisha Chakrabarty (Keele University)
    Abstract: Since 1989, there has been a sharp increase in the role of caste and religion in determining political fortunes at both state and federal levels in India. As a consequence, significant intercaste and inter-religion differences in earnings have the potential to stall the process of economic reforms. Yet, the patterns and determinants of such differences remain unexplored. We address this lacuna in the literature, and explore the determinants of the differences in inter-caste and inter-religion earnings in India during the 1987-99 period, using the 43rd and 55th rounds of National Sample Survey (NSS). Our results suggest that (a) earnings differences between "upper" castes and SC/ST have declined between 1987 and 1999, (b) over the same period, earnings differences between Muslims and non-Muslims have increased, to the detriment of the former, and (c) inter-caste and inter-religion differences in earnings can be explained largely by corresponding differences in educational endowment and returns on age (and, hence, experience). However, differences in returns on education do not explain inter-caste and inter-religion earnings differences to a great extent.
    Keywords: inequality, caste, religion, India
    JEL: O15 O17
    Date: 2006–03
  10. By: Erik Stam; David Audretsch; Joris Meijaard
    Abstract: Why should individuals that have exited their firm consider re-entering into entrepreneurship, i.e. become renascent entrepreneurs? According to the logic of economic models of firm dynamics there is no reason to re-enter into entrepreneurship following termination of a previous firm. In contrast, research on nascent entrepreneurship has shown the positive effect of entrepreneurial experience on planning a new firm start. Based on the empirical evidence from a database consisting of ex-entrepreneurs, this study shows that renascent entrepreneurship is a pervasive phenomenon in current society. Especially entrepreneurial human and social capital induce renascent entrepreneurship. In addition, the nature of the firm exit also affects the probability of renascent entrepreneurship.
    Keywords: entrepreneurial preferences, entrepreneurial skills, firm exit, renascent entrepreneurship, economics of entrepreneurship
    Date: 2006–03
  11. By: Weili Ding (Queen's University); Steven Lehrer (Queen's University); J. Niles Rosenquist (University of Pennsylvania); Janet Audrain-McGovern (University of Pennsylvania)
    Abstract: This paper examines the influence of health conditions on academic performance during adolescence. To account for the endogeneity of health outcomes and their interactions with risky behaviors we exploit natural variation within a set of genetic markers across individuals. We present strong evidence that these genetic markers serve as valid instruments with good statistical properties for ADHD, depression and obesity. They help to reveal a new dynamism from poor health to lower academic achievement with substantial heterogeneity in their impacts across genders. Our investigation further exposes the considerable challenges in identifying health impacts due to the prevalence of comorbid health conditions and endogenous health behaviors.
    Keywords: health, education, genetic predisposition, obesity, ADHD, depression, instrumental variables, risky health behaviors
    JEL: I1 I2 C21
    Date: 2006–01

This nep-hrm issue is ©2006 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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