nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2006‒10‒07
thirteen papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. People I Know: Workplace Networks and Job Search Outcomes By Federico Cingano; Alfonso Rosolia
  2. Determinants of long-run regional productivity: the role of R&D, human capital and public infrastructure By Raffaello Bronzini; Paolo Piselli
  3. Efficiency and Equity of European Education and Training Policies By Ludger Woessmann
  4. Education, Growth, and Redistribution in the Presence of Capital Flight By Debajyoti Chakrabarty
  5. Why do Low- and High-Skill Workers Migrate? Flow Evidence from France By Dominique M. Gross; Nicolas Schmitt
  6. Mind the Gap? Estimating the Effects of Postponing Higher Education By Bertil Holmlund; Qian Liu; Oskar Nordström Skans
  7. Entrepreneurial Decision Making: Examining Preferences for Causal and Effectual Reasoning in the New Venture Creation Process By Politis, Diamanto; Gabrielsson, Jonas
  8. Taxing Human Capital Efficiently: The Double Dividend of Taxing Non-Qualified Labour More Heavily Than Qualified Labour By Wolfram F. Richter
  9. When Does a Developing Country Use New Technologies? By Cuong Le Van; Olivier Bruno; Bruno Masquin
  10. Migrant Opportunity and the Educational Attainment of Youth in Rural China By Alan de Brauw; John Giles
  11. Successful Transition towards a Virtuous Cycle of Human Development and Economic Growth: Country Studies By Gustav Ranis; Frances Stewart
  12. Migrant Entrepreneurship from the Perspective of Cultural Diversity By Sahin, Mediha; Nijkamp, Peter; Baycan-Levent, Tuzin

  1. By: Federico Cingano (Bank of Italy - Economic Research Department); Alfonso Rosolia (Bank of Italy - Economic Research Department)
    Abstract: We examine the role of information networks in job-search outcomes of displaced individuals. We draw on longitudinal Social Security records covering the universe of worker-firm matches in a tight labor market in Northern Italy. Unlike previous research, we focus on workplace networks whose labor market attributes we are able to describe extensively. A workplace network is defined as all coworkers a displaced individual worked with prior to displacement. Estimates of network effects are thus affected by omitted variable bias if the labor market sorts workers across firms along relevant determinants of search outcomes and network characteristics or if past coworkers are exposed to the same shocks. The empirical strategy accounts for these possibilities by comparing subsequent outcomes of workers displaced by the same firm; in addition, we exploit the longitudinal dimension to develop controls for potential residual within-firm heterogeneity. In particular, we control for pre-displacement wages and employment status as well as descriptions of pre-displacement firms and their workforce. Contacts’ labor market attributes have a significant effect on a variety of job search outcomes. Employed contacts significantly increase the probability of re-employment. They are more effective if they experienced a recent job change and when geographically and technologically closer to the displaced. Stronger ties and lower competition for the available information also speed up re-employment. While largely irrelevant for unemployment duration, contacts’ quality is a significant determinant of entry wages and subsequent job stability.
    Keywords: Unemployment, Wages, Job Stability, Social Networks
    JEL: J23 J64
    Date: 2006–09
  2. By: Raffaello Bronzini (Bank of Italy); Paolo Piselli (Bank of Italy)
    Abstract: In this paper we estimate the long-run relationship between regional total factor productivity, R&D, human capital and public infrastructure between 1980 and 2001. We take advantage of recent developments panel cointegration techniques that control for endogeneity of regressors to estimate cointegration vectors. Empirical evidence shows that there exists a long-run equilibrium between productivity level and the three kinds of capital; among them, human capital turns out to have the strongest impact on productivity. Regional productivity is found also to be positively affected by R&D activity and public infrastructure of neighbouring regions. Finally, results of the Granger-causality tests support the hypothesis that human capital and infrastructure Granger-cause productivity in the long-run while the opposite is not true; only for R&D stock is the bi-directional causality found.
    Keywords: Total factor productivity, research and development, public infrastructure, human capital, panel cointegration
    JEL: O4 O18 R11 C23
    Date: 2006–09
  3. By: Ludger Woessmann
    Abstract: This paper reviews empirical evidence, especially from Europe, on how education and training policies can be designed to advance both efficiency and equity. Returns to educational investments tend to decrease over the life cycle. Moreover, they seem to be highest for children from disadvantaged families at early stages and for the well-off at late stages of the life cycle. This creates complementarities between efficiency and equity at early stages and trade-offs at late stages. The paper goes on to discuss specific policies for efficiency and equity at each educational stage, ranging from early childhood education and schools over vocational and higher education to training and lifelong learning. The available evidence suggests that both efficiency and equity can be enhanced by output-oriented reforms properly designed to each stage, where the state generally sets a regulatory framework that ensures accountability and funding and uses the forces of choice and competition to deliver best results. Designed this way, education and training systems can advance efficiency and equity at the same time.
    Keywords: education, training, Europe, efficiency, equity, life cycle, trade-off
    JEL: D60 H52 I28 J24
    Date: 2006
  4. By: Debajyoti Chakrabarty
    Abstract: We construct an overlapping generations model to study the effect of capital controls on human capital investments and the incidence of redistributive politics in a growing economy. We argue that the conventional wisdom linking higher capital controls to lower growth is reproduced only when an economy is sufficiently developed. For under-developed countries, higher capital controls are beneficial for human capital accumulation suggesting that the wisdom does not apply. In an augmented version of the model, we show that a modern sector, characterized by positive levels of investment in education, may not exist unless capital controls are sufficiently high. In particular, higher capital controls make it feasible for a modern sector to exist by lowering the threshold income level required by workers to invest in human capital. These results are consistent with recent evidence suggesting that capital account liberalization positively affects growth only after a country has achieved a certain threshold level of absorptive capacities.
    Keywords: Capital Flight, Economic Growth, Human Capital, Income Distribution, Long Term Capital Movements, Optimal Taxation
    JEL: D33 E62 F21 O19 O40
    Date: 2006–09
  5. By: Dominique M. Gross; Nicolas Schmitt
    Abstract: With a focus on the role of cultural clustering and income distribution, this paper investigates whether standard determinants influence international migration of workers to France with the same intensity across different skill levels and with or without free mobility. We find that low-skill migrants respond to most push and pull migration factors. High-skill migrants however respond only to financial incentives and cultural clustering does not matter. Migration policy is effective at controlling flows of low-skill migrants but free mobility has no impact on high-skill flows. Hence, France must rely on growing earnings and skill-premium to attract high-skill workers from high income countries.
    JEL: F22 J24 O24
    Date: 2006
  6. By: Bertil Holmlund; Qian Liu; Oskar Nordström Skans
    Abstract: This paper estimates the effects on earnings of “gap years” between high school and university enrollment. The effect is estimated by means of standard earnings functions augmented to account for gap years and a rich set of control variables using administrative Swedish data. We find that postponement of higher education is associated with a persistent and non-trivial earnings penalty. The main source of the persistent penalty appears to be the loss of work experience after studies. The reduction of lifetime earnings associated with two years postponement of higher education amounts to 40-50 percent of annual earnings at age 40.
    Keywords: timing of education, schooling interruptions, returns to work experience
    JEL: I23 J24 J31
    Date: 2006
  7. By: Politis, Diamanto (Department of Business Administration, School of Economics and Management, Lund University); Gabrielsson, Jonas (Department of Business Administration, School of Economics and Management, Lund University)
    Abstract: A growing body of studies emphasizes the discovery of opportunities and the decision to exploit them as the essence of entrepreneurial activity. Following this stream of research, we present a study that examines entrepreneurs’ preferences for causal and effectual reasoning in the new venture creation process. The dominating view is that entrepreneurial decision making to a large degree varies in response to the unique situational context. In contrast, we are in this paper particularly interested to what extent individual career experiences and career motives makes entrepreneurs in favour of one decision making logic over another. From this point of departure we develop hypotheses of the expected influence of career experience and career motives on entrepreneurs’ preferences for causal and effectual reasoning. Statistical analysis on a sample of 291 Swedish entrepreneurs give ample support for the argument that entrepreneurs’ career experience and career motives have a significant influence on entrepreneurial decision making. The finding suggests that future research into entrepreneurial decision making should include career experience and career motives as contingency variables. Furthermore, the article provides an attempt to operationalize entrepreneurs’ preference for causal and effectual modes of reasoning. To our knowledge no such operationalizations exists.
    Keywords: entrepreneurial decision making; career experience; career motives; effectuation
    Date: 2006–09–19
  8. By: Wolfram F. Richter (University of Dortmund and IZA Bonn)
    Abstract: Assuming decreasing returns to education and the endogenous supply of qualified and nonqualified labour it is shown to be efficient to supplement a consumption tax with positive incentives for education. If the return from education is isoelastic and if the choice is between (i) subsidizing the monetary cost of education and (ii) taxing non-qualified labour income more heavily than qualified labour income while keeping the effective cost of education constant, the latter policy is shown to be second-best efficient. In particular, any tax distortions should be constrained to labour choices while the choice of education should remain undistorted. The result holds for arbitrary utility functions.
    Keywords: endogenous choice of labour and education, efficient taxation, human capital investment, double dividend hypothesis
    JEL: H2 I2 J24
    Date: 2006–09
  9. By: Cuong Le Van (CES - Centre d'Economie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]); Olivier Bruno (GREDEG - [Université de Nice Sophia-Antipolis]); Bruno Masquin (GREDEG - [Université de Nice Sophia-Antipolis])
    Abstract: We develop a model of optimal pattern of economic development that is first rooted in physical capital accumulation and then in technical progress. We study an economy where capital accumulation and<br />innovative activity take place within a two sector model. The first sector produces a consumption good using physical capital and non skilled labor. Technological progress in the consumption sector is driven by the research activity that takes place in the second sector. Research activity which produces new technologies requires technological capital<br />and skilled labor. New technologies induce an endogenous increase of the Total Factor Productivity of the consumption sector. Physical and technological capital are not substitutable while skilled and non skilled labor may be substitutable.<br />We show that under conditions on the adoption process of new technologies, the optimal strategy for a developing country consist in accumulating<br />physical capital first; postponing the importation of technological capital to the second stage of development. This result is due to<br />a threshold effect from which new technologies begin to have an impact on the productivity of the consumption sector. However, we show that<br />once a certain level of wealth is reached, it becomes optimal for the economy to import technological capital to produce new technologies.
    Keywords: capital accumulation, two sector model, technological progress, new technologies, Total Factor Productivity, skilled labor, non skilled labor
    Date: 2006–09–26
  10. By: Alan de Brauw (International Food Policy Research Institute); John Giles (Michigan State University and IZA Bonn)
    Abstract: In this paper, we investigate how reductions of barriers to migration affect the decision of middle school graduates to attend high school in rural China. Change in the cost of migration is identified using exogenous variation across counties in the timing of national identity card distribution, which made it easier for rural migrants to register as temporary residents in urban destinations. We show that timing of ID card distribution is unrelated to local rainfall shocks affecting demand for migration, and not related to proxies reflecting time-varying changes in village policy or administrative capacity. We find a robust negative relationship between migrant opportunity and high school enrollment. The mechanisms behind the negative relationship are suggested by observed increases in subsequent local and migrant non-agricultural employment of high school age young adults as the size of the current village migrant network increases.
    Keywords: migration, educational attainment, rural China
    JEL: O12 O15 J22 J24
    Date: 2006–09
  11. By: Gustav Ranis (Economic Growth Center, Yale University); Frances Stewart (Oxford University)
    Abstract: This paper explores the two-way links between Economic Growth and Human Development by examining the performance of some countries which have been successful in both dimensions and a few which have not. The specific aim is to examine the historical experience of six countries in order to determine how a system can move to a situation in which improvements in Human Development accompany and support higher rates of growth which, in turn, contribute to further improvements in Human Development as the basic societal objective.
    Keywords: Economic Growth, Human Development, Comparative Country Studies
    JEL: O11 O15 O57
    Date: 2006–09
  12. By: Sahin, Mediha (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Nijkamp, Peter; Baycan-Levent, Tuzin
    Abstract: The phenomenon of migrant entrepreneurship refers to business activities undertaken by migrants with a specific socio-cultural and ethnic background or migrant origin. The studies on migrant entrepreneurship in both the US and Europe have recognized the significant share of immigrants in SME activities. In the context of migrant entrepreneurship several scholars have highlighted the impact of different migrant group cultures on entrepreneurship. They emphasize the importance of values like social or business attitude, close family and religious ties and trust, which enable some immigrant groups to compete successfully in business. Against this background, the aim of this paper is to review and evaluate migrant entrepreneurship from the perspective of cultural diversity. The paper investigates key socio-economic and cultural aspects of migrant entrepreneurship and next addresses different migrant group entrepreneurs in the Netherlands in order to compare the differences between various migrant groups and to explore cultural diversity in migrant entrepreneurship.
    Keywords: Entrepreneurship; Migrant entrepreneurship; Cultural diversity
    JEL: A13 E24
    Date: 2006
  13. By: K. SUNDARAM (Delhi School of Economics)
    Abstract: Against the backdrop of policy of reservation of seats in Higher Education for the Other Backward Castes in India, this paper examines two inter-related yet distinct issues: (i) the use of economic criteria for assessing the backwardness of different social groups and (ii) assessment of fairness of access to higher education of an identified “backward” social group. On an analysis of the NSS 55th Round Surveys for 1999-2000 we show that on a range of economic criteria there is a clear hierarchy across (essentially) caste-based social groups with the Scheduled Castes (in Urban India) and the Scheduled Tribes (in Rural India) at the bottom, the Other Backward Castes (OBCs) in the middle and the non-SC/ST Others at the top. However, for the poor among them, there is more of a continuum across caste-groups with surprisingly small differences between the OBCs and the non-SC/ST Others. On the issue of fair access to higher education, it is argued that the extent of under-(or over-) representation of a social group can only be judged by a comparison of a social group’s share in enrollments in a given level of education with its share in the population eligible for entry into that level of education. And it is shown that for the OBCs as a group, and especially for over 70 percent of them who are above the poverty line, the extent of under-representation of the OBCs in enrollments at the under-graduate and post-graduate levels is less than 5 percent. We conclude, therefore, that a 27 percent quota for the OBCs, which would effectively raise their share in enrollments to over 50 percent when their share in the eligible population is 30 percent or less, is totally unjustified.
    Keywords: India, Social Groups, Backwardness, Poverty, Caste-based Reservations, Fair Access to Higher Education.
    JEL: I
    Date: 2006–09

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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