nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒03‒10
thirteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. How Important is Human Capital? A Quantitative Theory Assessment of World Income Inequality By Andres Erosa; Tatyana Koreshkova; Diego Restuccia
  2. Quantifying Quantitative Literacy: Age Heaping and the History of Human Capital By Brian A'Hearn; Jörg Baten; Dorothee Crayen
  3. The Impact on Growth of Higher Efficiency of Public Spending on Schools By Frédéric Gonand
  4. Entrepreneurship, State Economic Development Policy, and the Entrepreneurial University By David Audretsch; Ronnie J. Phillips
  5. The Human Capital Cost of Landmine Contamination in Cambodia By Ouarda Merrouche
  6. To Segregate or to Integrate: Education Politics and Democracy By David de la Croix; Matthias Doepke
  7. Schooling and Citizenship : Evidence from Compulsory Schooling Reforms By Thomas Siedler
  8. Skill wage premia, employment, and cohort effects : are workers in Germany all of the same type? By Fitzenberger, Bernd; Kohn, Karsten
  9. Faculty Rewards and Education Portfolios: A Report on Faculty Perceptions By Yee-Yee, Hla; Gnanajothy, Ponnudurai; Chan, Tze-Haw
  10. Using Boundary Changes to Estimate the Impact of School Competition on Test Scores By Simon Burgess; Helen Slater
  11. A Macroeconomic Estimation of the Education Production Function By Nadir Altinok
  12. Globalization, Deindustrialization, and Adult Education By Sorokina, Olga
  13. Wage inequality, segregation by skill and the price of capital in an assignment model By Ángel Gavilán

  1. By: Andres Erosa; Tatyana Koreshkova; Diego Restuccia
    Abstract: We develop a quantitative theory of human capital investment in order to evaluate the magnitude of cross-country differences in total factor productivity (TFP) that explains the variation in per-capita incomes across countries. We build a heterogeneous-agent economy with cross-sectional variation in ability, schooling, and expenditures on schooling quality. In our theory, the parameters governing human capital production and random ability process have important implications for a set of cross-sectional statistics - Mincer return, variance of earnings, variance of schooling, and intergenerational correlation of earnings. These restrictions of the theory and U.S. household data are used to pin down the key parameters driving the quantitative implications of the theory. Our main finding is that human capital accumulation strongly amplifies TFP differences across countries. In particular, we find an elasticity of output per worker with respect to TFP of 2.8: a 3-fold difference in TFP explains a 20-fold difference in output per worker. We argue that the cross-country differences in human capital implied by the theory are consistent with a wide array of evidence including earnings of immigrants in the United States, average mincer returns across countries, and the relationship between average years of schooling and per-capita income across countries. The theory implies that using Mincer returns to measure human capital understates differences across countries by a factor of 2.
    Keywords: output per worker, TFP, human capital, heterogeneity, inequality
    JEL: O1
    Date: 2007–03–06
  2. By: Brian A'Hearn; Jörg Baten; Dorothee Crayen
    Abstract: Age data frequently display excess frequencies at round or attractive ages, such as even numbers and multiples of five. This phenomenon of age heaping has been viewed as a problem in previous research, especially in demography and epidemiology. We see it as an opportunity and propose its use as a measure of human capital that can yield comparable estimates across a wide range of historical contexts. A simulation study yields methodological guidelines for measuring and interpreting differences in age heaping, while analysis of contemporary and historical datasets demonstrates the existence of a robust correlation between age heaping and literacy at both the individual and aggregate level. To illustrate the method, we generate estimates of human capital in Europe over the very long run, which support the hypothesis of a major increase in human capital preceding the industrial revolution.
    Keywords: Human Capital, Age Heaping, Growth, Industrial Revolution, Numeracy
    JEL: I21 N01 N30
    Date: 2006–11
  3. By: Frédéric Gonand
    Abstract: This paper assesses the impact on economic growth of increased efficiency of public spending in primary and lower-secondary education. Higher efficiency in public spending in schools can bolster growth through two main channels. On the one hand, it can allow a transfer of labour from the public sector to the business sector at unchanged educational output. On the other, it can enhance educational output and productivity of the future labour force at unchanged public employment and expenditures. The paper argues that, in most cases, efficiency gains... <P>Effet sur la croissance d'un système éducatif primaire et secondaire plus efficace <BR>Ce document de travail évalue l'effet sur le PIB d'une efficacité accrue de la dépense publique dans le secteur de l'éducation primaire et secondaire. Une plus grande efficacité du système éducatif peut soutenir l'activité notamment grâce à des transferts d'effectifs du secteur public vers le secteur privé, ou une hausse de la performance des élèves et de leur productivité future à dépenses...
    Keywords: human capital, réforme structurelle, capital humain, structural reforms, Public education, Public spending efficiency, Education nationale, Efficacité de la dépense publique, long-run economic growth, croissance à long terme
    JEL: H11 I20 I28
    Date: 2007–02–27
  4. By: David Audretsch; Ronnie J. Phillips
    Abstract: In this paper, we discuss the nature of the university-industry relationship and recommend specific policies to help achieve the goal of greater economic growth. We argue that state-supported research universities can be used to integrate entrepreneurship into state economic development and incubate entrepreneurial companies. Regional entrepreneurship policy is a new strategy that regards economic development as a process that goes from supporting research and development to creating and growing new businesses. Specifically, we believe that an entrepreneurial higher education system is a key to state-level economic policies. There is an opportunity at research universities to combine the human capital talent available on faculties with the needs and expertise of private industry to accelerate entrepreneurship and economic growth.
    Date: 2007–02
  5. By: Ouarda Merrouche (European University Institute)
    Abstract: The International Campaign to Ban Landmines production and use estimates that there are more than 80 billion landmines in the ground in more than 80 countries. Despite the scale of the problem and large investments by OECD countries to clear mines in low income countries, the economic consequences of landmine contamination have been so far unexamined by economists working on the economics of wars, perhaps due to the lack of data thus far. Using unique data from Cambodia, this paper estimates the effect of landmine contamination on human capital. These effects are identified using difference-in-differences (DD) and instrumental variables (IV) estimators. In the DD framework I exploit two sources of variation in an individual’s exposure to the conflict: her age in 1970 due to the spread of landmines over time and landmine contamination intensity in her district of birth. The IV specification uses the distance to the Thai border as an exogenous source of variation in landmine contamination intensity. The IV estimate indicates a education loss of 0.4 years at the mean and no visible effect on earnings. I discuss three factors that probably drive down the returns to education in post-war Cambodia: (1) The downgrading of educated people during the Khmer rouge regime (2) Direct Effects of landmines on the returns to education (3) the destruction of physical capital and technological delay through capital-skill complementarity.
    Date: 2006–12
  6. By: David de la Croix (Department of Economics and CORE, Université Catholique de Louvain); Matthias Doepke (University of California, Los Angeles, CEPR, and NBER)
    Abstract: The governments of nearly all countries are major providers of primary and secondary education to its citizens. In some countries, however, public schools coexist with private schools, while in others the government is the sole provider of education. In this study,we askwhy different societiesmake different choices regarding the mix of private and public schooling. We develop a theory which integrates private education and fertility decisionswith voting on public schooling expenditures. In a given political environment, high income inequality leads to more private education, as rich people opt out of the public system. Comparing across political systems, we find that concentration of political power can lead to multiple equilibria in the determination of public education spending.
    JEL: D72 I21 H42 O10
    Date: 2007
  7. By: Thomas Siedler
    Abstract: This paper examines whether schooling has a positive impact on individual's political interest, voting turnout, democratic values, political involvement and political group membership, using the German General Social Survey (ALLBUS). Between 1949 and 1969 the number of compulsory years of schooling was increased from eight to nine years in the Federal Republic of Germany, gradually over time and across federal states. These law changes allow one to investigate the causal impact of years of schooling on citizenship. Years of schooling are found to be positively correlated with a broad range of political outcome measures. However, when exogenous increase in schooling through law changes is used, there is no evidence of a causal effect running from schooling to citizenship in Germany.
    Keywords: Voting, civic engagement, education, externalities, instrumental variables estimation
    JEL: I2 H4 H23
    Date: 2007
  8. By: Fitzenberger, Bernd; Kohn, Karsten
    Abstract: This paper studies the relationship between employment and wage structures in West Germany based on the IAB employment subsample 1975{1997. It extends the analytical framework of Card and Lemieux (2001) which simultaneously includes skill and age as important dimensions of heterogeneity. After having identified cohort effects in skill wage premia and in the evolution of relative employment measures, we estimate elasticities of substitution between employees in three different skill groups and between those of different age, taking account of the endogeneity of wages and employment. Compared to estimates in the related literature, we find a rather high degree of substitutability. Drawing on the estimated parameters, we simulate the magnitude of wage changes within the respective skill groups that would have been necessary to halve skill-specific unemployment rates in 1997. The required nominal wage reductions range from 8.8 to 12.2% and are the higher the lower the employees' skill level.
    Keywords: Labor Demand, Heterogeneity, Age, Skill, Wage Structure, Employment, Cohort Effects, Unemployment
    JEL: E24 J21 J31
    Date: 2006
  9. By: Yee-Yee, Hla; Gnanajothy, Ponnudurai; Chan, Tze-Haw
    Abstract: Many schools in the developed world have adopted portfolios in an attempt to address the scholarship of teaching. This is because of the atmosphere of “publish or perish” which pervades academia. Buying off teaching obligations with research dollars is an increasingly pervasive practice in many institutions and Faculty caught up in this system have generally gone along with it, focusing on the scholarship of discovery at the expense of the scholarship of integration, application, and teaching - little of which carries the financial consequence or peer recognition of sponsored research.1 Add to this the fact that many medical schools world wide have adopted teacher- intensive, integrated hybrid PBL curricula and the result is frustrated teachers who undergo occupational burnout. An ideal faculty reward system should support the priorities and mission of the institution e.g. if improving the quality of teaching and learning is a high priority, then the tenure, promotion, and merit pay system must support quality efforts to redesign the curriculum, improve courses, and increase the effectiveness of teaching.2 Education Portfolios are not widely used in this part of the world, and few Faculty have even heard of the term “Education Scholarship”. This study is a preliminary report on perception of the faculty rewards in place in their institution and their familiarity with the concept of education scholarship. A questionnaire was posted to Faculty of medical schools in Malaysia and also distributed to staff of the National University of Singapore, during an international conference. A total of 54 responses were collected from six institutions (14 were unidentified); representing a response rate of about twenty per cent. Thirty two were teaching in a hybrid curriculum; and 26 were clinical teachers. Thirty three had been in their respective institutions for more than three years.
    Keywords: Faculty Rewards; Education Portfolios; medical schools
    JEL: I00 I23
    Date: 2006
  10. By: Simon Burgess; Helen Slater
    Abstract: We study the impact of school choice on test score outcome. It has generally proved difficult to isolate exogenous differences in the degree of competition faced by schools. We run a difference-in-difference analysis, exploiting a local government reorganisation to provide identification. This reorganisation changed the boundaries of education markets. We analyse one cohort of children passing through secondary school before the change, and one afterwards, both for the treated (re-organised) area and for similar control areas. Our point estimates suggest that the fall in competition experienced reduced test scores, but the estimates are not statistically significant.
    Keywords: School choice, school competition, educational outcomes
    JEL: I21 I28
    Date: 2006–10
  11. By: Nadir Altinok (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - [CNRS : FRE5211] - [Université de Bourgogne])
    Abstract: The aim of this paper is to test the existence of an education production function based on data resulting from international surveys of pupil assets. The results of the estimates, using first the total sample, and then making distinctions according to the economic level of the country, show significant differences concerning the relationships between educational inputs and outputs. Thus, inconsistencies found in former analyses in terms of estimating the education production function can partially be explained by the fact that they failed to take into account the economic level of the countries analysed.
    Keywords: Education quality ; Human Capital ; Public Expenditure
    Date: 2007–02–26
  12. By: Sorokina, Olga
    Abstract: Does globalization and sectoral changes in the economy drive adults back to school? Globalization promotes the demand for adult education in two important ways. First, deindustrialization in the OECD countries deepens the need for retraining of workers displaced from manufacturing. Second, by enhancing knowledge transmission between the countries, globalization speeds up the dissemination of innovations, hence creating the need for frequent updating of workers’ knowledge and skills base. In this paper I examine the demand for adult education in the light of industrial change and knowledge transformation. I estimate the returns to adult education at different points during the lifetime, while taking into account the participation decisions. My finding show that returns to education are positive for young adults and middle-aged individuals, suggesting the need for expansion of education systems to accommodate the demand for lifelong learning in the new globalized economy.
    Keywords: globalization; sectoral change; deindustrialization; adult education; human capital
    JEL: I2 J62 M53
    Date: 2007–01
  13. By: Ángel Gavilán (Banco de España)
    Abstract: Some pieces of empirical evidence suggest that in the U.S., over the last few decades, (i) wage inequality between-plants has risen much more than wage inequality within-plants and (ii) there has been an increase in the segregation of workers by skill into separate plants. This paper presents a frictionless assignment model in which these two features can be explained simultaneously as the result of the decline in the relative price of capital. Additional implications of the model regarding the skill premium and the dispersion in labor productivity across plants are also consistent with the empirical evidence.
    Keywords: wage inequality, segregation by skill, assignment model, price of capital
    JEL: C78 J31 J24
    Date: 2006–06

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.
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