nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2006‒07‒28
fourteen papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Migrant Remittances, Human Capital Formation and Job Creation Externalities in Colombia By Maurice Kugler
  2. Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions By Martin Valdivia; Dean Karlan
  3. Making the Italian Labor Market More Flexible: An Evaluation of the Treu Reform By Dario Sciulli
  4. On Human Capital in Post-Conflict Sudan: Some Exploratory Results By Ali Abdel Gadir Ali
  5. Childhood Family Structure and Schooling Outcomes : Evidence for Germany By Marco Francesconi; Stephen P. Jenkins; Thomas Siedler
  6. Inside the Family Firm: The Role of Families in Succession Decisions and Performance By Morten Bennedsen; Kasper M. Nielsen; Francisco Pérez-González; Daniel Wolfenzon
  7. Aging and Economic Growth: Issues Relevant to Singapore By Shandre Thangavelu; Yong Aik Wei
  8. Intentions to Return of Irregular Migrants: Illegality as a Cause of Skill Waste By Nicola D. Coniglio; Giuseppe De Arcangelis; Laura Serlenga
  9. Unions, Wages and Labour Productivity : Evidence from Indian Cotton Mills By Gupta, Bishnupriya
  10. Female Labor Market Transitions in Europe By Lutz C. Kaiser
  11. Trade and product innovations as sources for productivity increases: an empirical analysis By Butter, Frank A.G. den; Wit, Paul
  12. The well-being of flemish primary school principals By Devos, G.; Bouckenooghe, D.; Engels, N.; Hotton, G.; Aelterman, A.
  13. Welfare Effects of Penalty Charges to Firms that Do Not Offer Apprenticeship Training Positions By Kai-Joseph Fleischhauer
  14. Risk and Schooling Decisions in Rural Madagascar: a Panel Data Analysis By Flore Gubert; Anne-Sophie Robilliard

  1. By: Maurice Kugler
    Abstract: In this paper we model the effect of migrant remittances on job creation and human capital formation, given migration prospects. Model calibration of deep parameters was performed with data from the AMCO survey on migration and remittances. The simulations based on the model show that remittances can have offsetting effects on equilibrium human capital and labor market out- comes in the country of origin of migrants. First, remittances enhance school- ing opportunities for recipient households, and human capital formation can be augmented. Second, an increase in human capital supply by recipient house- holds induces job creation as labor demand increases in the origin country. If a sufficiently large share of remittance recipients do not migrate, then the net effect is brain gain rather than brain drain ensuing remittances. The job cre- ation spillover in local labor markets increases the rate of return to schooling for nonrecipient households, whose members are less likely to migrate. As a result, there are more incentives to substitute consumption for human capital investment. At the same time, the rise in expected income due to the spillover induces higher desired consumption. If the “substitution effect” outweighs the “income effect”, then remittances will increase overall human capital and re- duce the unemployment rate. The calibration and simulation analyses suggest that he net effect of remittances depends upon the accessibility of education and the degree and labor market frictions in the origin country as well as the immigration policy in the destination country of migrants.
    Keywords: Migrant remittances, education, brain gain, job creation
    JEL: F22 F36 O11 J69
  2. By: Martin Valdivia (Grupo de Analisis para el Dessarrollo); Dean Karlan (Economic Growth Center, Yale University)
    Abstract: Can one teach entrepreneurship, or is it a fixed personal characteristic? Most academic and policy discussion on microentrepreneurs in developing countries focuses on their access to credit, and assumes their human capital to be fixed. However, a growing number of microfinance organizations are attempting to build the human capital of micro-entrepreneurs in order to improve the livelihood of their clients and help further their mission of poverty alleviation. Using a randomized control trial, we measure the marginal impact of adding business training to a Peruvian village banking program for female microentrepreneurs. Treatment groups received thirty to sixty minute entrepreneurship training sessions during their normal weekly or monthly banking meeting over a period of one to two years. Control groups remained as they were before, meeting at the same frequency but solely for making loan and savings payments. We find that the treatment led to improved business knowledge, practices and revenues. The microfinance institution also had direct benefits through higher repayment and client retention rates. Larger effects found for those that expressed less interest in training in a baseline survey have important implications for implementing similar market-based interventions with a goal of recovering costs.
    Keywords: entrepreneurship, microfinance, business training, business skills, adult education
    JEL: C93 D12 D13 D21 I21 J24 O12
  3. By: Dario Sciulli
    Abstract: The Treu Law introduced temporary contracts and extended the applicability of fixed-term contracts in order to increase the flexibility of the labour market and to reduce unemployment. The paper inquires whether the reform has affected the duration dependence related to the out-flow from non-employment, how previous atypical contract experiences affect the probability of finding a stable job and if the probability of flowing toward a permanent contract is higher moving from a non-working state rather than from an atypical job. Applying a Mixed Proportional Hazard (MPH) model with competing risk to a sub-sample drawn from the WHIP dataset, I estimate the hazard rate for the state transitions. My main findings predict an increase in negative duration dependence for non-working state out-flow, meaning an amplification of the short-term unemployed - long-term unemployed duality. It is a consequence of the larger use of atypical contracts, that would provide a screening instrument for the hiring choices of firms. Previous atypical job experiences play a negative effect on the probability of moving toward a stable job if the origin state is a non-working condition, while they have a positive role in the transition toward an atypical job. Besides, there is no evidences that the probability of finding a permanent contract is higher for workers who move from an atypical contract rather from a non-working state. Finally, a human capital accumulation effect is found to explain the transition toward a stable job. Policy recommendations include promotion of longer contracts, implementation of training programs and services to facilitate job-search.
    Date: 2006–04
  4. By: Ali Abdel Gadir Ali
  5. By: Marco Francesconi; Stephen P. Jenkins; Thomas Siedler
    Abstract: We analyse the impact on schooling outcomes of growing up in a family headed by a single mother. Growing up in a non-intact family in Germany is associated with worse outcomes in models that do not control for possible correlations between common unobserved determinants of family structure and educational performance. But once endogeneity is accounted for, whether by using sibling-difference estimators or two types of quasi-experiments, the evidence that family structure affects schooling outcomes is much less conclusive. Although almost all the point estimates indicate that non-intactness has an adverse effect on schooling outcomes, confidence intervals are large and span zero.
    Keywords: Childhood family structure, lone parenthood, educational success, sibling differences, instrumental variables, treatment effects
    JEL: C23 D13 I21 J12 J13
    Date: 2006
  6. By: Morten Bennedsen; Kasper M. Nielsen; Francisco Pérez-González; Daniel Wolfenzon
    Abstract: This paper uses a unique dataset from Denmark to investigate the impact of family characteristics in corporate decision making and the consequences of these decisions on firm performance. We focus on the decision to appoint either a family or external chief executive officer (CEO). The paper uses variation in CEO succession decisions that result from the gender of a departing CEO’s firstborn child. This is a plausible instrumental variable (IV), as male first-child firms are more likely to pass on control to a family CEO than are female first-child firms, but the gender of the first child is unlikely to affect firms’ outcomes. We find that family successions have a large negative causal impact on firm performance: operating profitability on assets falls by at least four percentage points around CEO transitions. Our IV estimates are significantly larger than those obtained using ordinary least squares. Furthermore, we show that family-CEO underperformance is particularly large in fast-growing industries, industries with highly skilled labor force and relatively large firms. Overall, our empirical results demonstrate that professional, non-family CEOs provide extremely valuable services to the organizations they head.
    JEL: G32 G34 M13
    Date: 2006–07
  7. By: Shandre Thangavelu (Singapore Centre for Applied and Policy Economics, Department of Economics, National University of Singapore); Yong Aik Wei (Singapore Centre for Applied and Policy Economics, Department of Economics, National University of Singapore)
    Abstract: The paper studies the effects of the changing age and education composition of the labour force on productivity growth in Singapore. The quality change of workers from aging and education is measured through a quality index. Quality change through education is the key driving force for the productive performance of the labour force. On the other hand, the growth in the labour quality of workers by age, and hence, its contribution to labour productivity growth is falling. To moderate the impact of the aging labour force on productivity growth, greater efforts to raise the educational profile of the labour force and to re-train older workers are required.
    JEL: J24 O40
  8. By: Nicola D. Coniglio (Norwegian School of Economics and Business Administration (NHH) and University of Bari.); Giuseppe De Arcangelis (University of Rome La Sapienza.); Laura Serlenga (CREST and University of Bari.)
    Abstract: In this paper we show that highly skilled illegal migrants may be more likely to return home than migrants with low or no skills when illegality causes skill waste, i.e. reduced ability of making use of individual capabilities both in the labor and the financial markets. This result is in contrast with common wisdom on return migration, according to which low-skill individuals are more likely to go back home rather than high-skill migrants. The simple theoretical life-cycle framework that shows the former result is tested on a sample of illegal migrants crossing Italian borders in 2003. The estimation results confirm that highly skilled illegal migrants are more willing to return home.
    Keywords: Illegal migration, labor skills, skill waste.
    JEL: F22 C25
  9. By: Gupta, Bishnupriya (Department of Economics, University of Warwick)
    Abstract: This paper uses firm level data from all the textile producing regions in India to examine the relation between wages, unionization and labour productivity. We find that fewer workers were employed per machine in the unionized mills in Bombay and Ahmedabad, as compared to non-unionized regions implying that low labour productivity was not due to union resistance to increased work intensity. Our findings suggest that while low wages in India encouraged overmanning, higher wages, prompted by unionization, had productivity enhancing effects. We explore alternative explanations for low labour productivity, arising from the managerial and institutional structure of Indian cotton mills.
    Date: 2006
  10. By: Lutz C. Kaiser
    Abstract: Using micro panel data, labor market transitions are analyzed for the EU-member states by cumulative year-by-year transition probabilities. As female (non-)employment patterns changed more dramatically than male employment in past decades, the analyses mainly refer to female labor supply. In search for important determinants of these transitions, six EU-countries with different labor market-regimes are selected as examples (Denmark, Germany, Netherlands, Portugal, Ireland, UK). Within these countries, women's determinants of labor market transitions are compared by means of pooled multinominal logit-regressions. The outcomes hint at both, the importance of socio-economic determinants, like the life cycle or human capital, but also address gender related differences in the paths of labor market transitions. Clearly, the observed cross-national differences are driven by specific national institutional settings. Among others, one of the most crucial features is the day-care infrastructure concerning children, which either fosters or restricts a sustainable risk management between family and work in the respective countries.
    Keywords: labor supply, labor market transitions, socio-economic determinants, institutional settings, risk management, cross-national comparison
    JEL: J21 J22 J78
    Date: 2006
  11. By: Butter, Frank A.G. den (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Wit, Paul
    Abstract: Commonly increases in total factor productivity (TFP) are associated with technological innovations measured by R&D expenditures. Empirical evidence seems to corroborate this relationship. However, in trading countries like the Netherlands, productivity increases, even in industry, can also be the result of innovations in the way transactions are managed. These innovations reduce transaction costs and exploit the welfare gains from (further) international division of labour. Such innovations are only partly included in R&D data. Consequently there is not much attention for these "trade innovations" - as we label them - in policy. In an empirical analysis this paper compares the influence of trade innovations with the influence of R&D expenditures on TFP in various industrialized countries. It appears that, at least in the Netherlands, trade innovations are as important for TFP as technological innovations which directly affect the efficiency of production, and which we label "product innovations".
    Keywords: R&D; Innovation; Transaction costs; Total factor productivity
    JEL: F10 F43 O47
    Date: 2006
  12. By: Devos, G.; Bouckenooghe, D.; Engels, N.; Hotton, G.; Aelterman, A.
    Abstract: The goal of this inquiry is to indicate which individual, organisational and external environment factors contribute to a better understanding of the well-being of Flemish primary school principals. The quantitative and qualitative outcomes suggest that well-being is a complex psychological phenomenon affected by a myriad of factors. The analyses indicate that general self-efficacy and achievement orientedness are significantly correlated with several aspects of positive (i. e. job satisfaction and job enthusiasm) and negative well-being (i.e. cynicism and personal accomplishment). With respect to school culture and structural characteristics, very weak almost negligible effects are noted. In addition, the analysis demonstrates the significant role school boards fulfill in explaining both positive and negative well-being. Finally, the role of central government in generally is found to affect well-being in a negative way. Data from a representative sample of primary schools in Flanders (N=46) were gathered through questionnaires (principals and teachers) and semi-structured interviews (principals). The findings of this paper provide important information for policy makers concerned with the improvement of the well-being of primary school principals. Although prior research investigated the influence of different antecedents on well-being, several limitations in method and conceptual framework yielded information of which the usefulness must be considered tentative (Ross, 1999). In this inquiry an attempt is made to overcome these limitations and contribute to the literature in a double way: (1) This study adopts a concurrent mixed method approach of data collection; (2) Well-being is examined from a positive psychology (job enthusiasm and job satisfaction) and negative psychology approach (burnout), whereas prior research almost exclusively looked at the negative pole of well-being.
    Keywords: primary school principals, well-being, mixed method approach.
    Date: 2006–07–12
  13. By: Kai-Joseph Fleischhauer
    Abstract: In Germany, there is currently a discussion about the implementation of penalty charges if firms refuse to offer apprenticeship training positions to school graduates. This paper aims at analyzing the policy instrument of penalty charges by a theoretical model that systematically compares its costs and benefits. Building on recent training literature, a two-period partialequilibrium model is designed that allows for worker heterogeneity in ability and covers special features of the German apprenticeship system. With respect to overall welfare, the implementation of penalty charges solves a trade-off. On the one hand, penalty charges increase the number of apprenticeship training positions and thus the fraction of trained workers in the workforce. On the other hand, some firms will leave the market to avoid the financial burden, which generates unemployment among workers with low ability. Altogether, we demonstrate that optimal penalty charges increase the overall welfare compared to the laissez-faire equilibrium if the productivity-enhancement of apprenticeship training exceeds some lower bound.
    Keywords: Human Capital Formation, Apprenticeship Training, Inefficient Training Decision of Firms, Penalty Charges
    JEL: I28 J24 J31
    Date: 2006–07
  14. By: Flore Gubert (DIAL, IRD, Paris); Anne-Sophie Robilliard (DIAL, IRD, Paris)
    Abstract: (english) Most households in rural Madagascar are engaged in agriculture and derive a large share of their income from the production of food or cash crops and from animal husbandry. However, agricultural yields can be extremely volatile due to weather conditions, pests, insects, rodents and other calamities. As a result, households record large fluctuations in their incomes that must be dealt with. Since the usual consumption-smoothing market mechanisms are quite limited in the Malagasy context, households need to rely on nonmarket mechanisms or to adopt multi-faceted strategies to cope with risk. In this paper, we examine the possibility that parents obtain informal income insurance by letting their children work. We test this hypothesis by examining the relationship between household income shocks and human capital investment in children. In particular, we investigate whether children’s propensity to join school and to drop out of school responds to transient shocks. We also investigate issues such as gender and intrahousehold resource allocation. _________________________________ (français) La plupart des ménages ruraux malgaches tirent l’essentiel de leurs revenus de l’agriculture et sont exposés à un fort degré d’incertitude en raison de la fréquence et de l’intensité des aléas frappant les champs de culture ou les troupeaux. En l’absence de marchés du crédit ou de l’assurance, des moyens alternatifs pour éliminer ou atténuer les conséquences défavorables de cette incertitude doivent être trouvés par les ménages. Dans cet article, nous envisageons la possibilité que la mise au travail des enfants constitue un mécanisme de gestion des risques. Afin de tester cette hypothèse, nous examinons les déterminants de la scolarisation en cycle primaire d’un échantillon d’enfants issus de ménages ruraux. Nous examinons notamment le rôle des chocs de revenu subis par les ménages sur les probabilités d’entrée (dans) et de sortie hors de l’école de leurs membres en âge d’être scolarisés, en portant une attention particulière aux questions de genre et d’allocation intra-ménage des ressources. Les résultats indiquent que les chocs transitoires de revenu ont un impact significatif sur la probabilité de sortie de l’école mais pas sur la probabilité d’entrer à l’école. Cela suggère que la déscolarisation des enfants les plus âgés constitue un mécanisme de gestion du risque pour les ménages ruraux.
    Keywords: Schooling decisions, Transitory shocks, Risk-coping strategies, Décision de scolarisation, Chocs transitoires, Stratégies de gestion des risques.
    JEL: D91 I21 J24 O55
    Date: 2006–06

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