nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2006‒11‒12
eight papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Labor market flexibility and investment in human capital By Djavad Salehi-Isfahani; Russell D. Murphy
  2. European Regional Convergence in a Human Capital Augmented Solow Model By Hans-Friedrich Eckey; Christian Dreger; Matthias Türck
  3. Econometric Evidence Regarding Education and Border Income Performance By Almada, Christa; Blanco-Gonzalez, Lorenzo; Eason, Patricia; Fullerton, Thomas
  4. Staying on the Dole By Holger Strulik; Jean-Robert Tyran; Paolo Vanini
  5. Gender disparities in education - needs community participation By Pandey, Adya Prasad
  6. Demographic Swings and Early Childhood Education in Iran By Djavad Salehi-Isfahani; Hania Kamel
  7. The role of job interruptions, temporary contracts and multi-firm experiences in the temporality trap in Spain By Yolanda Rebollo Sanz
  8. Slavery and other property rights By Lagerlöf, Nils-Petter

  1. By: Djavad Salehi-Isfahani; Russell D. Murphy
    Abstract: We consider the effect of labor market rigidities on human capital accumulation and economic growth when some human capital is difficult to observe prior to employment. We distinguish between two types of human capital, those that formal schooling and test scores can measure (``knowledge") and those that can be observed by employers only after a period of employment (``creativity"). We build a simple model to show when employers have limited discretion to set wages or terminate employment they favor the more reliable signals of ``knowledge'', such as years of schooling and class rank, at the expense ``creativity'', which stands for non-testable skills. Individuals in rigid labor markets will therefore favor greater acquisition of knowledge at the expense of creativity, which results in distorted accumulation of human capital and lower growth. We explore the implications of our model for the relevant debates in the empirical growth literature, returns to education literature, and education policy. Our model suggests a possible reason why the social return to education appears low in cross country regressions. These regressions treat years of schooling in countries with more and less flexible labor markets as the same. We show that distinguishing empirically between countries with rigid and flexible labor markets can help reveal the greater productivity of schooling in the latter. Schooling in the latter is correlated with greater investment in non-observable skills.
    Keywords: Labor Market flexibility, investment in human capital, schooling, cognitive and non-cognitive skills, cross country regressions
    Date: 2006
  2. By: Hans-Friedrich Eckey (Department of Economics, University of Kassel); Christian Dreger (DIW, Berlin); Matthias Türck (Department of Economics, University of Kassel)
    Abstract: In this paper, the process of productivity convergence is investigated for the enlarged European Union using regional (NUTS-2) data. The Solow model extended by human capital is employed as a workhorse. Alternative strategies are proposed to control for spatial effects. All specifications confirm the presence of convergence with an annual speed between 3 and 3.5 percent towards regional steady states. Furthermore, a geographically weighted regression approach indicates a wide variation in the speed of convergence across the regions, where a higher speed is striking in particular in France and the UK. Clusters of convergence can be identified, where regions with high convergence also have high initial income levels.
    Keywords: Solow model, regional convergence, spatial lags, spatial filtering
    JEL: C21 O47 R11 R15
    Date: 2006–10
  3. By: Almada, Christa; Blanco-Gonzalez, Lorenzo; Eason, Patricia; Fullerton, Thomas
    Abstract: This study examines the relationship between education and income in Texas counties that are located along the border with Mexico. Estimation results confirm ealrier research results for this region. Parameter heterogeneity underscores the increased importance of education in the service-oriented labor market that has emerged in recent years in the United States. Simulation results quantify the income gains that could potentially be realized if drop out rates were lowered in the border counties included in the sample.
    Keywords: Education; Texas border incomes; applied econometrics.
    JEL: J38 R11
    Date: 2006
  4. By: Holger Strulik (University of Hannover); Jean-Robert Tyran (Department of Economics, University of Copenhagen); Paolo Vanini (University of Zurich)
    Abstract: We develop a simple model of short- and long-term unemployment to study how labor market institutions interact with labor market conditions and personal characteristics of the unemployed. We analyze how the decision to exit unemployment and to mitigate human capital degradation by retraining depends on education, skill degradation, age, labor market tightness, taxes, unemployment insurance benefits and welfare assistance. We extend our analysis by allowing for time-inconsistent choices and demonstrate the possibility of an unemployment trap.
    Keywords: unemployment; skill degradation; retraining; unemployment benefits; welfare assistance; present-biased preferences
    JEL: J64 J31 J38
    Date: 2006–10
  5. By: Pandey, Adya Prasad
    Abstract: Education is the most important instrument for human resource development. Education of girls therefore, occupies top priority amongst various measures taken to improve the status of the girl child. The government has resolved to make the right to free and compulsory elementary education a Fundamental Right and to enforce it through suitable statutory measures. Universalisation of Elementary Education (UEE) has been accepted as a national goal since 1950. In order to achieve the goal, concerted efforts have been made and as a result, the elementary education system in India has become one of the largest in the world. The primary education enrolment rates of girls have a positive impact on economic well-being of women, their families and society in the long run. Since the mother carries the main burden of looking after the health of her child, how well she does this task depends on the knowledge and confidence that she gains from education.
    Keywords: Gender Disparities ediucation needs community participation; appandey; adyaprasad pandey; bhu; varanasi
    JEL: I31 A1 A19
    Date: 2006–08
  6. By: Djavad Salehi-Isfahani; Hania Kamel
    Abstract: In recent years Iran has greatly expanded its early childhood education program, taking first place in the Middle East in preschool enrolment. In this paper we examine the reasons for the unusual expansion and argue that it is in large part an institutional response to demographic changes in Iran, notably the sharp fertility decline of the 1990s. Fertility declined from more than 6 births per woman in the 1980s to about 2 in 2004, while during the same period kindergarten enrollments increased from less than 10 percent of 5 year old children to nearly one half of the population. Economists usually think of the effect of the reduction in fertility on child schooling in terms of a trade-off between quantity and quality. In their models both fertility decline and rising investment in child education are attributed to choices made by families to substitute quality for quantity of children. In the case of Iran, expansion of pre-school education appears to have an institutional explanation. In the early 1990s, following the decline in primary school enrolments in early 1990s, itself caused by fertility decline a few years earlier, caused a surplus of primary school teachers. In an attempt to preserve primary school teachers’ jobs, public schools worked together with parents to set up kindergarten classes in public schools, even though pre-primary education was not part of their official mandate.
    Keywords: Iran demographic swings; childhood education
    Date: 2006
  7. By: Yolanda Rebollo Sanz (Department of Economics, Universidad Pablo de Olavide)
    Abstract: The path to a permanent contract often implies a sequence of temporary jobs, multi-firms experiences and unemployment spells. This paper investigates whether the characteristics of the path may influence the chances to get a permanent contract and the duration itself at the nonpermanent state. We estimate a simple hazard model with unobserved heterogeneity to examine the average duration at the non-permanent position needed to get a permanent one, either in the same or in other firm. The analysis considers two different groups of workers specially affected by temporary contracts. These are the young workers who just enter into the labor market, and the long term unemployed. We find evidence of the existence of the temporality trap. The probability of accessing into a permanent contract is non linearly related to the duration at the non-permanent state. It starts increasing but once it reaches a maximum it drops to pretty low levels. Besides, repeated temporary contracts and job interruptions reduce it while multi-firm experiences seem do not affect it negatively.
    Keywords: Temporary employment, temporality trap, Single risk models, Unobserved heterogeneity
    JEL: J64 J41
    Date: 2006–11
  8. By: Lagerlöf, Nils-Petter
    Abstract: The institution of slavery is found mostly at intermediate stages of agricultural development, and less often among hunter-gatherers and advanced agrarian societies. We explain this pattern in a growth model with land and labor as inputs in production, and an endogenously determined property rights institution. The economy endogenously transits from an egalitarian state with equal property rights, to a despotic slave society where the elite own both people and land; thereafter it endogenously transits into a free labor society, where the elite own the land, but people are free.
    Keywords: Slavery; long-run growth
    JEL: E0 Q15 P51
    Date: 2003–05

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