nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2006‒04‒29
ten papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Human capital accumulation over the life cycle under multiple sources of uncertainty By Saïd Hanchane; David Touahri
  2. Cyclical Strikes and Human Capital Accumulation under Asymmetric Information. By P. Fortunato
  3. Rethinking the Gains from Immigration: Theory and Evidence from the U.S. By Gianmarco I.P. Ottaviano; Giovanni Peri
  4. Human Capital and Political Business Cycles By Akhmedov Akhmed
  5. Social Capital and Labour Productivity in Italy By Fabio Sabatini
  6. Comprehensive versus Selective Schooling in England in Wales: What Do We Know? By Jörn-Steffen Pischke; Alan Manning
  7. Does the Early Bird Catch the Worm? Instrumental Variable Estimates of Educational Effects of Age of School Entry in Germany By Puhani, Patrick A.; Weber, Andrea M.
  8. Joint Decisions on Household Membership and Human Capital Accumulation of Youths: The role of expected carnings and labour market rationing. By G. C. Giannelli; C. Monfardini
  9. Measuring and Analysing Educational Inequality: The Distribution of Grade Enrolment Rates in Latin America and Sub-Saharan Africa By Frankema, Ewout; Bolt, Jutta
  10. Wage Premia and Skill Upgrading in Italy: Why didn't the Hound Bark?. By P. Manasse; L. Stanca; A. Turrini

  1. By: Saïd Hanchane (LEST - Laboratoire d'économie et de sociologie du travail - - [CNRS : UMR6123] - [Université de Provence - Aix-Marseille I][Université de la Méditerranée - Aix-Marseille II] - []); David Touahri (LEST - Laboratoire d'économie et de sociologie du travail - - [CNRS : UMR6123] - [Université de Provence - Aix-Marseille I][Université de la Méditerranée - Aix-Marseille II] - [])
    Abstract: In this paper, we analyse the human capital accumulation process over the life cycle of individuals under the hypothesis of earnings uncertainty. To do so, we develop a continuous time dynamic programming model which takes into account several sources of uncertainty, concerning the human capital accumulation process and the labour market. In particular, the risks over future wage rates and over-education are explicitly taken into account. The model permits an in-depth study of each source's effect of uncertainty on human capital investment. We demonstrate that investment in education may be encouraged, depending on the individual's perception of the different risks.
    Keywords: Human capital; Life cycle; Risk; Stochastic optimal control
    Date: 2006–04–18
  2. By: P. Fortunato
  3. By: Gianmarco I.P. Ottaviano (University of Bologna); Giovanni Peri (University of California, Davis and NBER)
    Abstract: The standard empirical analysis of immigration, based on a simple labor demand and labor supply framework, has emphasized the negative impact of foreign born workers on the average wage of U.S.-born workers (particularly of those without a high school degree). A precise assessment of the average and relative effects of immigrants on U.S. wages, however, needs to consider labor as a differentiated input in production. Workers of different educational and experience levels are employed in different occupations and are therefore imperfectly substitutable. When taking this approach, one realizes that foreign-born workers are “complements” of U.S.-born workers in two ways. First, foreign-born residents are relatively abundant in the educational groups in which natives are scarce. Second, their choice of occupations for given education and experience attainments is quite different from that of natives. This implies that U.S.- and foreign-born workers with similar education and experience levels are imperfectly substitutable. Accounting carefully for these complementarities and for the adjustment of physical capital induced by immigration, the conventional finding of immigration’s impact on native wages is turned on its head: overall immigration over the 1980- 2000 period significantly increased the average wages of U.S.-born workers (by around 2%). Considering its distribution across workers, such an effect was positive for the wage of all native workers with at least a high school degree (88% of the labor force in year 2000), while it was null to moderately negative for the wages of natives without a high school degree.
    Keywords: Foreign-Born, Skill Complementarities, Wages, Gains from Migration
    JEL: F22 J61 J31
    Date: 2006–04
  4. By: Akhmedov Akhmed
    Abstract: Classical theory considers political business cycle as a result of either opportunistic behavior of government (opportunistic cycle) or aiming policy on certain constituency (partisan cycle). In this paper, we propose an alternative explanation of the phenomenon of political business cycle — experience of government. We propose an illustration that shows that elections infer cycles without any opportunism or ideology of incumbents. We also build a model with endogenous ego-rent. The model explains a channel to increase incentives, when none has commitment — governors need to develop skills to increase their value for public and increase probability to get re-elected. Using fiscal monthly data of Russian regions from 1996 to 2004, we got evidence both of positive effect of experience on performance and opportunistic component of the cycle. We also got evidence of diminishing return on experience.
    Keywords: Russia, elections, opportunistic business cycle, experience, sunk cost, Russian regions
    JEL: D72 E32 H72 P16
    Date: 2006–04–26
  5. By: Fabio Sabatini (University of Rome La Sapienza)
    Abstract: This paper carries out an empirical assessment of the relationship between social capital and labour productivity in small and medium enterprises in Italy. By means of structural equations models, the analysis investigates the effect of different aspects of the multifaceted concept of social capital. The bonding social capital of strong family ties and the bridging social capital shaped by informal ties connecting friends and acquaintances are proved to exert a negative effect on labour productivity, the economic performance, and human development. On the contrary, the linking social capital of voluntary organizations positively influences such outcomes.
    Keywords: Labour productivity, Small and medium enterprises, Social capital, Social networks, Structural equations models
    JEL: J24 R11 O15 O18 Z13
    Date: 2006–02
  6. By: Jörn-Steffen Pischke; Alan Manning
    Abstract: British secondary schools moved from a system of extensive and early selection and tracking in secondary schools to one with comprehensive schools during the 1960s and 70s. Before the reform, students would take an exam at age eleven, which determined whether they would attend an academically oriented grammar school or a lower level secondary school. The reform proceeded at an uneven pace in different areas, so that both secondary school systems coexist during the 1960s and 70s. The British transition therefore provides an excellent laboratory for the study of the impact of a comprehensive versus a selective school system on student achievement. Previous studies analyzing this transition have typically used a value-added methodology: they compare outcomes for students passing through either type of school controlling for achievement levels at the time of entering secondary education. While this seems like a reasonable research design, we demonstrate that it is unlikely to successfully eliminate selection effects in who attends what type of school. Very similar results are obtained by looking at the effect of secondary school environment on achievement at age 11 and controlling for age 7 achievement. Since children only enter secondary school at age 11, these effects are likely due to selection bias. Careful choice of treatment and control areas, and using political control of the county as an instrument for early implementation of the comprehensive regime do not solve this problem.
    JEL: I21 I28
    Date: 2006–04
  7. By: Puhani, Patrick A.; Weber, Andrea M.
    Abstract: We estimate the effect of age of schoo entry on educational outcomes using two different data sets for Germany, sampling pupils at the end of primary school and in the middle of secondary school. Results are obtained based on instrumental variable estimation exploiting the exogenous variation in mont of birth. We find robust and significant positive effects on educational outcom for pupils who enter school at seven instead of six years of age: Test scores at the end of primary school increase by about bout 0.40 standard deviations and the probability to attend the highest secondary schooling track (Gymnasium) increases by about twelve percentage point.
    Keywords: education, immigration, policy, identification
    JEL: I21 I28 J24
    Date: 2006–04
  8. By: G. C. Giannelli; C. Monfardini
  9. By: Frankema, Ewout; Bolt, Jutta (Groningen University)
    Abstract: Cross-country research on educational inequality presents contrasting views on the extent of educational inequality in Latin America and Sub-Saharan Africa. The differences in opinion also concern the relation between educational inequality and income inequality. This paper argues that part of the reported results are influenced by the type of inequality indicator applied. Moreover, there may be a separate effect of educational attainment and educational distribution on income inequality, which cannot be discerned properly by conventional indicators (in particular the Gini-coefficient faces this problem). A new indicator of educational distribution, which we coined the grade enrolment ratio, focuses at the distribution of students among consecutive grades in schooling, apart from average years of schooling (attainment). We find that the grade enrolment ratio outperforms the other indicators in explaining cross-country variation in income inequality and accurately assesses Latin American and Sub-Saharan African educational inequality.
    Date: 2006
  10. By: P. Manasse; L. Stanca; A. Turrini

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