nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2006‒12‒01
nineteen papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Unequal Opportunities and Human Capital Formation By Daniel Mejía; Marc St-Pierre
  2. The Role of Human Capital and Technological Interdependence in Growth and Convergence Processes: International Evidence By Cem Ertur; Wilfried Koch
  3. Free Education: For Whom, Where and When? By Leonid Azarnert
  4. Design Quality Indicator for Schools in the United Kingdom By OECD
  5. Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions, and the Great Divergence By Oded Galor; Omar Moav; Dietrich Vollrath
  6. The Quest for Productivity Growth in Agriculture and Manufacturing By María Dolores Guilló; Fidel Pérez Sebastián
  7. Technological Backwardness in Agriculture: Is It due to Lack of R&D Expenditures, Human Capital and Openness to International Trade? By Rodolfo Cermeño; Sirenia Várquez
  8. Product Market Competition, R&D Effort and Economic Growth By Alberto Bucci
  9. The Brain Drain and the World Distribution of Income and Population Growth By Andrew Mountford; Hillel Rapoport
  10. Educational Effects of Alternative Secondary School Tracking Regimes in Germany By Weber, Andrea M.
  11. Labour market transitions in Italy: the effects of the Treu Law on flows from an atypical contract By SCIULLI DARIO
  12. Land-Rich Economies, Education and Economic Development By Sebastian Galiani; Daniel Heymann
  13. Longevity and Lifetime Labor Input: Data and Implications By Moshe Hazan
  14. Schooling inequality and the rise of research By Bas Straathof
  15. Human Capital Dispersion and Incentives to Innovate By Maurizio Iacopetta
  16. Entrepreneurship and Economic Growth: An Empirical Analysis By Héctor Salgado-Banda
  17. Investment in Schooling and the Marriage Market By Pierre-Andre Chiappori; Murat Iyigun; Yoram Weiss
  18. Employment, Innovation, and Productivity: Evidence from Italian Microdata. By Hall, Bronwyn H.; Mairesse, Jacques; Lotti, Francesca
  19. Entrepreneurs, HRM Orientations and Environmental Fit: A UK-Japan Comparison in High Tech Manufacturing By Hugh Whittaker; Philippe Byosiere; Junpe Higuchi; Thelma Quince

  1. By: Daniel Mejía; Marc St-Pierre
    Abstract: This paper develops a tractable, heterogeneous agents general equilibrium model where individuals have different endowments of the factors that complement the schooling process. The paper explores the relationship between inequality of opportunities, inequality of outcomes, and aggregate efficiency in human capital formation. Using numerical solutions we study how the endogenous variables of the model respond to two different interventions in the distribution of opportunities: a meanpreserving spread and a change in the support. The results suggest that a higher degree of inequality of opportunities is associated with lower average level of human capital, a lower fraction of individuals investing in human capital, higher inequality in the distribution of human capital, and higher wage inequality. In particular, the model does not predict a trade-off between aggregate efficiency in human capital formation (as measured by the average level of human capital in the economy) and equality of opportunity.
    Date: 2006–10–01
  2. By: Cem Ertur; Wilfried Koch
    Abstract: This paper develops a bisectorial growth model with physical and human capital accumulation. Each sector is characterized by a different technology involving different human capital parameters. The model includes human capital externalities together with technological interdependence between economies. It leads to a spatial autoregressive reduced form for the real income per worker at steady state. The structural parameters of the model are recovered and evidence of the insignificance of human capital in explaining per capita growth, that is the human capital puzzle, is reconsidered. In fact, the parameter related to human capital in the consumption good sector is low which is consistent with evidence presented in the growth accounting framework. In contrast it is indeed higher in the education sector. Our model leads to spatial econometric specifications which are estimated on a sample of 89 countries over the period 1960-1995 using maximum likelihood as well as Bayesian estimation methods, which are robust versus outliers and heteroskedasticity. This model yields a spatially augmented convergence equation characterized by parameter heterogeneity. A locally linear spatial autoregressive specification is then estimated providing a different convergence speed estimate for each country of the sample.
    Keywords: Conditional convergence, technological interdependence, spatial autocorrelation, parameter heterogeneity, locally linear estimation
    JEL: C14 C21 O4
    Date: 2006–06
  3. By: Leonid Azarnert
    Abstract: This article analyzes the effect of free public education on fertility, private educational investments and human capital accumulation at different stages of economic development. The model shows that when fertility is endogenous parental human capital levels are crucial for implications of free education. At early stages of development, if parental human capital is low, free access to basic education may provide the only chance to leave poverty. In contrast, at advanced stages of development, if parental human capital is high, the availability of free education crowds out private educational investments, increases fertility and may be detrimental for growth.
    Keywords: free public education, private education, fertility, human capital, economic growth
    JEL: I2 J1 O1
    Date: 2006–06
  4. By: OECD
    Abstract: In December 2005, the United Kingdom launched a process for evaluating the design quality of primary and secondary school buildings. The Design Quality Indicator (DQI) for Schools is a tool that can assist stakeholders – teachers, parents, school governors, students, community members, local authority clients and building professionals – to achieve design excellence in new or refurbished school buildings and grounds. The DQI framework was developed by the Department for Education and Skills and the Construction Industry Council.
    Date: 2006–11
  5. By: Oded Galor; Omar Moav; Dietrich Vollrath
    Abstract: This research suggests that favorable geographical conditions, that were inherently associated with inequality in the distribution of land ownership, adversely affected the implementation of human capital promoting institutions (e.g., public schooling and child labor regulations), and thus the pace and the nature of the transition from an agricultural to an industrial economy, contributing to the emergence of the Great Divergence in income per capita across countries. The basic premise of this research, regarding the negative effect of land inequality on public expenditure on education is established empirically based on cross-state data from the beginning of the 20th century in the United States.
    Keywords: Land Inequality, Institutions, Geography, Human capital accumulation, Growth
    JEL: O10 O40
    Date: 2006–06
  6. By: María Dolores Guilló; Fidel Pérez Sebastián
    Abstract: We develop a theory to explain the transition from stagnation to modern growth. We focus on the forces that shaped the evolution of total factor productivity in agriculture and manufacturing across history. More specifically, we build a multisector model of endogenous technical-change and economic growth. We consider an expanding-variety setup with rising labor specialization and two different R&D technologies, one for agriculture and another for manufacturing. As a consequence, total factor productivity in the model can increase via two different channels. First, population growth allows larger levels of specialization of land and labor in the economy that bring efficiency gains. This type of productivity improvement is capital saving, but can not generate sustained growth. Technical change is also possible by investing in R&D. Unlike specialization, new technologies generated in this way are land and labor augmenting, and are the key to modern growth. In the model, the economy has not incentives to invest in R&D until a minimum knowledge base is available to researchers. This is in line with ideas contained in Mokyr (2005). To make possible the accumulation of this minimum knowledge base, we assume that learning-by-doing is the implicit underlying force that leads to specialization. However, land and labor specialization is based on knowledge whose nature differs in agriculture and in manufacturing. More specifically, whereas this knowledge is farm-specific in agriculture, mainly concern with the acquisition of uncodified information about local conditions of soil and whether, specialization in manufacturing is the result of general knowledge, mainly codified, that contributes at a larger extent to the knowledge base.
    Keywords: stagnation, modern growth, specialization, learning-by-doing, R&D, Knowledge base
    JEL: O13 O14 O41
    Date: 2006–06
  7. By: Rodolfo Cermeño; Sirenia Várquez
    Abstract: In this paper we investigate the relationship between the agricultural technological level and R&D expenditures, human capital and openness to international trade using cross country information for a sample of 104 countries and various sub samples over the period 1961-1991. We first model the unobservable technological level as a dynamic stochastic process in the context of a general translog production function, and then we relate the implied technological levels to the aforementioned variables. For comparison, alternative specifications of the production and its associated technological process are also considered. We find that the proposed model outperforms all of the alternative specifications. The results suggest that the technological gap between developed and less developed countries in agriculture has increased considerably over this period of time and that, overall, the technological levels are directly related to R&D expenditures, human capital and openness, although this relationship is not robust across the different groups of countries considered.
    Keywords: Agricultural production function, Agricultural technology, Dynamic error components models, Non-linear models, R&D expenditures, Human capital, Openness
    Date: 2005–06
  8. By: Alberto Bucci
    Abstract: Empirical evidence has recently pointed to the lack of any relationship between R&D intensity (variously defined and measured) and economic growth in the post-war period in the United States and other OECD countries. Using a framework that integrates human capital accumulation and purposive (horizontal) innovation activity, this paper looks at product market competition as a possible solution to this puzzle. Indeed, we find that changes in product market competition may well have no influence on human capital investment (the growth engine), while affecting R&D effort.
    Keywords: Endogenous Growth; R&D Investment; Human Capital Accumulation; Product Market Competition
    JEL: D43 J24 L16 O31 O41
    Date: 2006–06
  9. By: Andrew Mountford; Hillel Rapoport
    Abstract: Over the last two decades immigration policies in OECD economies have become increasingly selective and the rate of skilled migration from low income economies has risen markedly. This paper analyzes the theoretical implications of this shift in migration patterns for the growth and distribution of world income and population using a model with endogenous education, fertility and migration decisions in both the sending and receiving economies. It shows that Brain Drain migration may cause fertility to fall and human capital accumulation to increase in both the sending and receiving economies. It also shows that the world economy may converge to a special kind of core-periphery equilibrium where increasing inequality between countries is fueled by Brain Drain migration but where, nonetheless, the welfare of agents in both the core and the periphery is increased. Thus Brain Drain migration may increase inequality between countries at the same time as reducing world poverty and increasing world growth.
    Keywords: Migration, Growth
    JEL: O40 F11 F43
    Date: 2006–06
  10. By: Weber, Andrea M.
    Abstract: This paper examines educational outcomes of pupils selected to secondary school types by different tracking regimes in a German state: The traditional regime of streaming pupils after fourth grade of elementary school is compared to a regime in which pupils are selected into different secondary school tracks after sixth grade. Descriptive evidence demonstrates that the proportion of pupils reaching the highest level of secondary education is relatively small for those who attended later tracking schools. Additionally, the incidence of track modification is relatively frequent for schools with a high proportion of incoming pupils from the later tracking regime. However, less favorable educational outcomes of the later tracking schools are due to self-selection of relative low performers into these schools: The downward bias in estimating tracking regime effects is reduced considerably by controlling for a broad variety of socio-economic background characteristics. Corresponding regression results mainly indicate that there are no negative effects of later tracking on observed educational outcomes measured in the middle of secondary school. Regression analyses for different sub-groups suggest that the reading performance of immigrant pupils is better under the later tracking regime compared to the early tracking system.
    Keywords: education, segregation, streaming, tracking, identification, immigration
    JEL: I21 I28
    Date: 2006–11
    Abstract: The aim of the paper is to estimate the flows from an atypical contract towards a new state, evaluating the effects of the Treu Law on them. Applying a standard Multinomial Logit model to the WHIP dataset, I find that some personal characteristics, job duration and number of previous atypical experiences explain the transition rates. After the introduction of the Treu Law, the transitions towards an atypical job are increased, both starting from an atypical contract and a non-working state. Furthermore, the paper analyzes the possibility of unobserved heterogeneity using a Random Effects MNL model. Policy recommendations include promotion of longer atypical contracts and assistance to disadvantages workers.
    Keywords: Labour market transitions, atypical jobs, Treu Law, random effects MNL model. JEL codes: J68, J60, C25, C33
    Date: 2006–04
  12. By: Sebastian Galiani; Daniel Heymann
    Abstract: We analyze the emergence of large-scale education systems in a setup where growth is associated with changes in the configuration of the economy. The model is based on three central elements: first, individual preferences over consumption goods generate changes in the composition of individual spending as income grows, embodied in Engel curves. Second, the production of sophisticated services is intensive in human capital. Third, investment in human capital by individual households faces borrowing constraints. Our model uses an overlapping generation framework similar to the one in Galor and Moav (2003). As that paper does, we also model the incentives that the economic ´elite may have (collectively) to accept taxation destined to finance the education of credit-constrained workers. In our model this incentive does not necessarily arise from a complementarity between physical and human capital in manufacturing. Rather, we emphasize the demand for human-capital-intensive services by high-income groups. The argument model seems capable to account for salient features of the development of Latin America in the 19th century, where, in particular, land-rich countries such as Argentina established an extensive public education system and a sophisticated service sector before developing significant manufacturing activities.
    Date: 2005–06
  13. By: Moshe Hazan
    Abstract: Recent growth theories have utilized the Ben-Porath (1967) mechanism according to which prolonging the period in which individuals may receive returns on their investment spurs investment in human capital and cause growth. An important, though sometime implicit implication of these models is that total labor input over the lifetime increases as longevity does. We propose a thought experiment to empirically evaluate the relevancy of this mechanism to the transition from “stagnation” to “growth” of the nowadays developed economies. Specifically, we estimate the expected total working hours over the lifetime of nine consecutive cohorts of American men born between 1840 and 1920. Our results show that despite a gain of almost 9 years in the expectations of life at age 20, the expected total working hours over the lifetime have declined from more than 117,000 hours to less than 90,000 between the oldest and the youngest cohorts. We conclude that the Ben-Porath mechanism have had a lesser effect than previously thought on the accumulation of human capital during the growth process.
    Keywords: longevity, human capital, hours-worked
    JEL: E20 J22 J24 J26 O11
    Date: 2006–06
  14. By: Bas Straathof
    Abstract: During the last twenty years the share of researchers in the workforce has been rising in OECD countries. The consistency of this pattern suggests that it is not a transitional phenomenon. This paper demonstrates that the rise of research can occur in the steady state when schooling inequality is declining. Comparative static analysis of a semi-endogenous growth model with a continuous distribution of skills shows that a reduction in skill inequality can have a variety of effects, which includes a rising share of researchers. Additionally, the height of the growth rate of mean educational attainment is shown to have a positive effect on the proportion of researchers in the workforce, without causing it to grow.
    Keywords: Schooling inequality; Economic growth
    JEL: O40 I20 J24
    Date: 2005–06
  15. By: Maurizio Iacopetta
    Abstract: Do policies that alter the allocation of human capital across individuals affect the innovation capacity of an economy? To answer this question I extend Romer’s growth model to allow for individual heterogeneity. I find that the value of an invention rises with equality. If skills and talents are evenly distributed, inventions are more widely adopted in production and users are willing to bid a higher price. Therefore more inequality is associated with a larger share of the population employed in the business of invention. But, somehow surprisingly, the analysis suggests that although an equal society values inventions more than an unequal one, it may produce fewer of them, or, equivalently, generates inventions of a lower quality. A calibration of the model suggests a weak, but positive, relationship between the rate of innovation and inequality. Finally, in a two-country world, in which ideas, individuals, and capital circulate without restrictions, I find that the unequal economy tends to specialize into the business of innovation. The main implication of the analysis is that an observed difference in the innovation rate between two countries with similar levels of education can hardly be attributed to variations in domestic human capital policies.
    Keywords: human capital, inequality, innovation
    JEL: O15 O31
    Date: 2006–06
  16. By: Héctor Salgado-Banda
    Abstract: This paper proposes a new variable based on patent data to proxy for productive entrepreneurship. Data on self-employment is used as an alternative proxy. In particular, the paper studies the impact of entrepreneurship on economic growth by using these two measures. The study considers 22 OECD countries and finds a positive relationship between the proposed measure of productive entrepreneurship — degree of innovativeness of different nations — and economic growth, while the alternative measure, based on self-employment, appears to be negatively correlated with economic growth. The findings are backed by a battery of econometric specifications and techniques.
    Keywords: cross-sectional analysis, dynamic panel data, economic growth, entrepreneurship, patents, self-employment, system estimation analysis
    Date: 2005–06
  17. By: Pierre-Andre Chiappori; Murat Iyigun; Yoram Weiss
    Abstract: We produce a model with pre-marital schooling investment, endogenuos marital matching and spousal specialization in homework and market production Pre-marital investments generate two kinds of returns: a labor-market return due to the education premium and a marriage-market return because education can improve the intra-marital share of the surplus one can extract from marriage. When the returns to education are gender neutral, men and women educate in equal proportions and there is pure positive assortative matching in the marriage markets. But if the returns are not gender neutral, then there is mixing in equilibrium where some educated individuals marry uneducated spouses and those who educate less because their labor-market return is lower extract a relatively larger share of the marital surplus. Conditional on the choice of schooling, couples’ career decisions affect the size of their marital surplus, but the existence of large and frictionless marriage markets can still produce efficient household specialization where the higher-wage spouse specializes in market production and the lower-wage spouse engages in homework. Even when cultural and social norms or the time requirements of homework dictate that wives devote relatively more time to homework, women can acquire more schooling than men if a gender wage gap exists but narrows with the level of education.
    Date: 2006–06
  18. By: Hall, Bronwyn H. (UNU-MERIT); Mairesse, Jacques (UNU-MERIT); Lotti, Francesca (Economics Research Department, Bank of Italy)
    Abstract: Italian manufacturing firms have been losing ground with respect to many of their European competitors. This paper presents some empirical evidence on the effects of innovation on employment growth and therefore on firms' productivity with the goal of understanding the roots of such poor performance. We use firm level data from the last three surveys on Italian manufacturing firms conducted by Mediocredito-Capitalia, which cover the period 1995-2003. Using a modified version of the model proposed by Harrison, Jaumandreu, Mairesse and Peters (2005), which separates employment growth rates into those associated with old and new products, we provide robust evidence that there is no employment displacement effect stemming from process innovation. The sources of employment growth during the period are split equally between the net contribution of product innovation and the net contribution from sales growth of old products. However, the contribution of product innovation is somewhat lower than that for the four comparison European countries considered by Harrison et al.
    Keywords: innovation, employment, productivity, Italy
    JEL: L60 O31 O33
    Date: 2006
  19. By: Hugh Whittaker; Philippe Byosiere; Junpe Higuchi; Thelma Quince
    Abstract: Entrepreneurs cannot develop a business single handedly. One of the most important tasks the entrepreneur faces is to recruit, allocate work to, motivate and retain employees who will help the business to grow. Based on survey data, this paper examines the HRM orientations of UK and Japanese high tech manufacturing entrepreneurs, and identifies fundamentally different approaches to these tasks, at least as expressed by the entrepreneurs. The UK entrepreneurs espouse an employment relationship based on 'give and take' flexibility, while the Japanese entrepreneurs are more focused on raising or nurturing their employees. Reasons for the differences are explored, and relate to the entrepreneurs' backgrounds, as well as the business and social environment. Implications for the 'new employment relationship' are explored.
    Keywords: Entrepreneurship; HR management; High-tech small firms
    JEL: L60 M12 M13 M14 M50
    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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