nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒02‒17
seventeen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Explaining the East German Productivity Gap — The Role of Human Capital By Joachim Ragnitz
  2. On Skill Heterogeneity, Human Capital, and Inflation By Radhika Lahiri; Elisabetta Magnani
  3. Education and economic growth By Geraint Johnes
  4. Skill acquisition and economic development — some comments By Bandopadhyay, Titas Kumar
  5. Exploring the Impact of Interrupted Education on Earnings: The Educational Cost of the Chinese Cultural Revolution By Xin Meng; Robert Gregory
  6. Explaining the Low Labor Productivity in East Germany. A Spatial Analysis By Nicola Fuchs-Schündeln; Rima Izem
  7. Aggregate Unemployment Decreases Individual Returns to Education By Ammermüller, Andreas; Kuckulenz, Anja; Zwick, Thomas
  8. Accounting for Intergenerational Income Persistence: Noncognitive Skills, Ability and Education By Jo Blanden; Paul Gregg; Lindsey Macmillan
  9. Capital émotionnel et genre : ce capital qui fait aussi la différence entre les filles et les garçons à l'école et au travail. By Bénédicte Gendron
  10. Entrepreneurship Capital: A Regional, Organizational, Team, and Individual Phenomenon By David Audretsch; Erik Monsen
  11. Peer Effects, Unobserved Factors and Risk Behaviours: An Analysis of Alcohol Abuse and Truancy among Adolescents By Rosa Duarte; José-Julián Escario; José-Alberto Molina
  12. Educational(work)performance in african countries:problems policies and prospects By Nwaobi, Godwin
  13. Efficiency in the further education sector in England: A subject level analysis By Jill Johnes; Steve Bradley; Alan Little
  14. Rising Wage Inequality in Germany By Gernandt, Johannes; Pfeiffer, Friedhelm
  15. A Millennium Learning Goal: Measuring Real Progress in Education By Deon Filmer; Amer Hasan; Lant Pritchett
  16. New Zealand Regions, 1986-2001: Labour Market Aspects of Human Capital By Ian Pool; Sandra Baxendine; William Cochrane; James Lindop
  17. The Effect of Match Quality and Specific Experience on Career Decisions By Shintaro Yamaguchi

  1. By: Joachim Ragnitz
    Abstract: The paper concentrates on the question whether the low level of productivity in East Germany can be explained by deficits in the stock of human capital. It is shown that figures on “formal” qualifications yield a too optimistic view on human capital endowments; in fact, the effective stock on human capital in East Germany is lower than in West Germany when differences in job activities are taken into account. One reason is the dominance of non human capitalintensive industries as a consequence of locational decisions in the past. Another reason is a low human capital intensity within the different branches which is a consequence of specialization within affiliated firms. In the next years human capital endowment of the East German economy will further deteriorate as a result of selective migration and unfavorable educational attendance of the younger cohorts. This impedes a fast convergence in productivity between East and West Germany.
    Keywords: Productivity, East Germany, Human Capital
    JEL: J24 O47
    Date: 2007–01
  2. By: Radhika Lahiri; Elisabetta Magnani (School of Economics and Finance, Queensland University of Technology)
    Abstract: This paper examines the welfare costs of inflation within a monetary dynamic general equilibrium framework with human capital that incorporates endogenous, ex ante skill heterogeneity among workers. Numerical experiments indicate that, overall, welfare costs are more likely to decrease with increases in skill heterogeneity. An implication of this feature is that a greater degree of skill heterogeneity may be associated with a higher tolerance for inflation, consequently implying a positive correlation between agent heterogeneity and inflation. Using a panel of several countries we empirically test this proposition. Our evidence lends some support to this hypothesis.
  3. By: Geraint Johnes
    Abstract: Contemporary views on the determinants of economic growth place education in centre stage. Yet the way in which education affects growth is not yet well understood. This paper begins by surveying the recent literature on the factors that affect growth, paying particular attention to education. It then proceeds to estimate a comprehensive model of growth, testing its robustness across regions of the world. Policy conclusions are drawn.
    Keywords: growth, education, political economy
    Date: 2006
  4. By: Bandopadhyay, Titas Kumar
    Abstract: Deme, Franck and Naqvi(2005) showed that the increased government expenditure on education, training and skill acquisition leads to lower unemployment rate, expansion of the urban formal sector and the contraction of the urban informal sector. This was observed to be the case in Lesotho. The result is based on the two vital assumptions: public expenditure on education ,training and skill acquisition should be very large; and the skill acquisition function is a rising step function. We present a general equilibrium model with perfect capital mobility to analyse the impact of government expenditure on skill acquisition on urban unemployment, the urban formal sector and the urban informal sector.We find that it is possible to derive the Deme, Frank and Naqvi(2005) result independent of the level of government expenditure and the nature of the skill function.
    Keywords: skill acquisition; economic development.
    JEL: H21 H2
    Date: 2006
  5. By: Xin Meng (Australian National University and IZA); Robert Gregory (Australian National University and IZA)
    Abstract: During the Chinese Cultural Revolution many schools stopped normal operation for a long time, senior high schools stopped student recruitment for up to 6 years, and universities stopped recruitment for an even longer period. Such large scale school interruptions significantly reduced the opportunity for a large cohort of individuals to obtain university degrees and senior high school qualifications. More than half of this cohort who would normally attain a university degree were unable to do so. We estimate that those who did not obtain a university degree, because of the Cultural Revolution, lost an average of more than 50 percent of potential earnings. Both genders suffered reduced attainment of senior high school certificates and more than 20 per cent prematurely stopped their education process at junior high school level. However, these education responses do not appear to have translated into lower earnings. In addition, at each level of education attainment most of the cohort experienced missed or interrupted schooling. We show, however, that given the education certificate attained, the impact on earnings of these missed years of schooling or lack of normal curricula was small.
    Keywords: education, earnings, Cultural Revolution, China
    JEL: I21 J31
    Date: 2007–01
  6. By: Nicola Fuchs-Schündeln; Rima Izem
    Abstract: This paper presents a spatial analysis of unemployment rates in Germany. The goal of this analysis is to explain the stubbornly low labor productivity and high unemployment rates in Eastern Germany. We build a model of commuting to distinguish between worker and job characteristics as the main causes of the low labor productivity, and use the method of simulated moments to estimate the East-West ratios of worker and job characteristics. The “slope” of the unemployment rate across the former East-West border serves as the main identification of the model. The preliminary results suggest that East and West German skills are very similar, while job characteristics differ significantly between East and West.
    Keywords: Transferability of Human Capital, Spatial Allocation of Labor
    JEL: C15 J24 J61
    Date: 2007–01
  7. By: Ammermüller, Andreas; Kuckulenz, Anja; Zwick, Thomas
    Abstract: On the basis of a theoretical model, we argue that higher aggregate unemployment affects individual returns to education. We therefore include aggregate unemployment and an interaction term between unemployment and the individual education level in a standard Mincer equation. Our results show that an increase in regional unemployment by 1% decreases the returns to education by 0.005 percentage points. This implies that higher skilled employees are better sheltered from labour market changes with respect to their jobs but encounter larger wage changes than less skilled employees. Differences in regional unemployment can in addition almost fully explain the observed large differences in regional returns to education. We use representative individual data and regional panel variation in unemployment between different German regions and for different employee groups. We demonstrate that our results are robust with respect to aggregation bias, time lags and potential endogeneity of the unemployment variable.
    Keywords: returns to education, unemployment, regional variation
    JEL: C23 J24
    Date: 2006
  8. By: Jo Blanden (University of Surrey, LSE and IZA); Paul Gregg (University of Bristol and LSE); Lindsey Macmillan (CMPO, University of Bristol)
    Abstract: We analyse in detail the factors that lead to intergenerational persistence among sons, where this is measured as the association between childhood family income and later adult earnings. We seek to account for the level of income persistence in the 1970 BCS cohort and also to explore the decline in mobility in the UK between the 1958 NCDS cohort and the 1970 cohort. The mediating factors considered are cognitive skills, noncognitive traits, educational attainment and labour market attachment. Changes in the relationships between these variables, parental income and earnings are able to explain over 80% of the rise in intergenerational persistence across the cohorts.
    Keywords: intergenerational mobility, children, skills
    JEL: J62 J13 J31
    Date: 2007–01
  9. By: Bénédicte Gendron (Centre d'Economie de la Sorbonne et Céreq)
    Abstract: Education participates to the social reproduction of gender and gender roles in the society. Does the origin of the inequalities between females and males start here ? Does girls education similar to that of boys ? If number of research has shown differences in female and male human capital endowment, especially regarding knowledge (savoir), know-how or skills (savoir-faire), still few researches have been stressing the impact of emotional competencies differences referring to personal skills or savoir-être. The traditional share between cognitive and affect domains impeded to measure the place taken by the “savoir-être” in training and individual construction and its impact on their future. In this article, we take into account the impact of gendered education on the development of females and males emotional capital. This latter can explain boys and girls differences regarding school performance and vocational guidance.
    Keywords: Emotional capital, boys, girls, gender, gender education, guidance, school performance.
    JEL: I29 J16
    Date: 2006–12
  10. By: David Audretsch; Erik Monsen
    Abstract: We review the role entrepreneurship capital in regional economic performance and extend it to explain the economic and entrepreneurial performance of organizations, teams, and individuals. Drawing on entrepreneurship and social capital research, we demonstrate that researchers at different level of analysis are in fact modeling the same underlying multi-level concept: entrepreneurship capital. We identify elements of entrepreneurship capital at and across the levels. Where there are gaps, we suggest new directions for research, public policy, and management practice that focus on enhancing organizational, interpersonal, and personal factors which promote entrepreneurial action at and across regional, organizational, team, and individual levels.
    Keywords: Entrepreneurship, Social Capital, Multilevel
    Date: 2007–02
  11. By: Rosa Duarte (University of Zaragoza); José-Julián Escario (University of Zaragoza); José-Alberto Molina (University of Zaragoza and IZA)
    Abstract: The objective of this paper is to examine the factors which affect alcohol abuse and truancy among adolescents. We propose a new theoretical specification in which alcohol abuse and truancy appear as derived demands, given that they condition peer group and family acceptance, and we introduce unobserved individual effects that can influence both behaviours. Empirically, our paper develops an analysis where, after controlling for the existence of unobserved individual factors affecting both decisions, we test for peer influences. Our results first show evidence that alcohol abuse and truancy share unobserved factors affecting both decisions, and then confirm the existence of significant peer group influences on these two deviant behaviours.
    Keywords: peer, unobserved factors, risk behaviours, alcohol, truancy, bivariate probit
    JEL: I10 I12 I20 I21
    Date: 2007–01
  12. By: Nwaobi, Godwin
    Abstract: Without education, development will not occur, only an educated people can command the skills necessary for sustainable economic growth and for a better quality of life. Recognizing this fact, African governments have placed heavy emphasis on expanding educational opportunities from primary school through university to the past four decades. More over, international organization have put so much emphasis on supporting educational expansion and improvement in Africa. However, education in Africa is in crisis today (and most especially for African universities). Enrollments rise as capacities for government support decline; talented staff are abandoning the campuses; libraries are out dated; research output are dropping, students are protesting overcrowded and inhospitable conditions; staffs are equally protesting poor working conditions (with continues strikes); university graduates are seriously underemployed or unemployed; and general educational quality is deteriorating. The need for action is urgent and thus effective educational policy making is imperative for the eradication of the identified problems.
    Keywords: education; africa; university; primary; secondary; tertiary; nonformaleducation; gender; policies; policy reforms; female education; labour force; work performance; early childhood; formal education; lifelong learning; examinations
    JEL: I21 I22 I23 I20
    Date: 2007–01–30
  13. By: Jill Johnes; Steve Bradley; Alan Little
    Abstract: An earlier study used data envelopment analysis (DEA) to establish that efficiency in further education (FE) colleges varies widely (Bradley, Johnes & Little 2006a). Further statistical analysis suggested that this is explained, to some extent, by student composition and factors relating to the area in which the college is located. This study builds on those results by investigating efficiency levels by subject of study within FE colleges. Mean DEA efficiency is found to vary from 76% to 88% in the worst- and best-performing subject areas, respectively. Further investigation using statistical methods indicates that, while student composition and regional characteristics affect efficiency at the subject level, their effects can vary by area of learning. This has the clear policy implication that strategies to improve efficiency in FE colleges must be devised and operated at subject rather than provider level.
    Keywords: Further Education, Efficiency, Data Envelopment Analysis
    Date: 2007
  14. By: Gernandt, Johannes; Pfeiffer, Friedhelm
    Abstract: This paper investigates the evolution of wages and the recent tendency to rising wage inequality in Germany, based on the German Socio-Economic Panel (GSOEP) for 1984 to 2004. Between 1984 and 1994 the wage distribution was fairly stable. Wage inequality started to increase around 1994 in Germany for all workers and for prime age dependent male workers as well. Rising inequality is not the result of the recent rise in self-employment. In West Germany rising inequality occurred in the lower part of the wage distribution, in East Germany in the upper part of the wage distribution. While residual wage inequality accounted for two-thirds of rising wage inequality in West Germany, in East Germany price effects dominated. In West Germany the group of workers with low tenure experienced higher inequality.
    Keywords: Education, tenure, skill composition, wage inequality, wage rigidity
    JEL: J21 J24 J31
    Date: 2006
  15. By: Deon Filmer; Amer Hasan; Lant Pritchett
    Abstract: The Millennium Development Goal for primary schooling completion has focused attention on a measurable output indicator to monitor increases in schooling in poor countries. We argue the next step, which moves towards the even more important Millennium Learning Goal, is to monitor outcomes of learning achievement. We demonstrate that even in countries meeting the MDG of primary completion, the majority of youth are not reaching even minimal competency levels, let alone the competencies demanded in a globalized environment. Even though Brazil is on track to the meet the MDG, our estimates are that 78 percent of Brazilian youth lack even minimally adequate competencies in mathematics and 96 percent do not reach what we posit as a reasonable global standard of adequacy. Mexico has reached the MDG—but 50 percent of youth are not minimally competent in math and 91 percent do not reach a global standard. While nearly all countries’ education systems are expanding quantitatively nearly all are failing in their fundamental purpose. Policymakers, educators and citizens need to focus on the real target of schooling: adequately equipping their nation’s youth for full participation as adults in economic, political and social roles. A goal of school completion alone is an increasingly inadequate guide for action. With a Millennium Learning Goal, progress of the education system will be judged on the outcomes of the system: the assessed mastery of the desired competencies of an entire age cohort—both those in school and out of school. By focusing on the learning achievement of all children in a cohort an MLG eliminates the false dichotomy between “access/enrollment” and “quality of those in school”: reaching an MLG depends on both.
    Keywords: primary school, poverty, millenium development goals, school completion, school enrollment
    JEL: I28 I20 O15
    Date: 2006–08
  16. By: Ian Pool (University of Waikato); Sandra Baxendine (Waikato District Health Board); William Cochrane (University of Waikato); James Lindop (University of Waikato)
    Abstract: This paper provides an analysis of labour force participation, full and part-time work and unemployment, over the 1986 – 2001 period. Using a non-conventional estimation technique devised for this paper, the paper also looks at discouraged worker effects. It points to growth in regional inequality and the worrying impact of negative labour market effects on ages 30-44 years that are central to both the economic and family life of the nation. Using a custom designed method to assess “discouraged worker” effects, this paper shows that such effects are probably higher than the levels shown in official statistics that are constrained by narrowly defined criteria.
    Keywords: Labour Force, Unemployment, Regions, New Zealand
    JEL: J21 J64 R23
    Date: 2006–02–01
  17. By: Shintaro Yamaguchi
    Abstract: This paper evaluates the effect of match quality and specific experiences on career decisions using NLSY79. I construct a dynamic career decision model which departs from the previous work in two respects. First, it deals with heterogeneous agents. Second, the returns to tenure and career specific experiences are taken into account. I show that match qualities have significant effect on job and career turnover decisions. In particular, career match quality has a greater effect on career decisions than employer match quality. However, I find that returns to tenure and career specific experience have little effect on job and career turnovers.
    Keywords: Specific Human Capital, Occupational Choice, Matching
    JEL: J24 J31 J41 J62
    Date: 2007–02

This nep-hrm issue is ©2007 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.