nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒03‒24
thirteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Bullying, Education and Labour Market Outcomes: Evidence from the National Child Development Study. By Sarah Brown; Karl Taylor
  2. Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform By Eric V. Edmonds; Nina Pavcnik; Petia Topalova
  3. Intergenerational Education Transmission: Neighborhood Quality and/or Parents’ Involvement? By Eleonora Patacchini; Yves Zenou
  4. Growth accounting in items of turbulence and death: efficiency, technology, capital accumulation and human capital 1929-1950 By Kerstin Enflo; Jörg Baten
  6. The Causal Effect of Education on Aggregate Income By Marcelo Soto
  7. The Puzzle of Non-Participation in Continuing Training – An Empirical Study of Permanent vs. Occasional Non-Participation By Uschi Backes-Gellner; Johannes Mure; Simone Tuor
  8. Territorial Differences in Italian Students’ Mathematical Competencies: Evidence from PISA 2003 By Massimiliano Bratti; Daniele Checchi; Antonio Filippin
  9. Class Origin, Family Culture, and Intergenerational Correlation of Education in Rural China By Hiroshi Sato; Li Shi
  10. The Return to Schooling in Structural Dynamic Models: A Survey By Christian Belzil
  11. Child Labor By Eric V. Edmonds
  12. International Competition in Hiring Labor and Selling Output - A Theoretical and Experimental Analysis By Siegfried K. Berninghaus; Werner Güth; Christian Hoppe; Christian Paul
  13. Are Shirking and Leisure Substitutable? An Empirical Test of Efficiency Wages Based on Urban Economic Theory By Stephen L. Ross; Yves Zenou

  1. By: Sarah Brown; Karl Taylor (Department of Economics, The University of Sheffield)
    Abstract: We explore the effect of bullying at school on the educational attainment of a sample of individuals drawn from the British National Child Development Study (NCDS). Our empirical findings suggest that school bullying has an adverse effect on human capital accumulation both at and beyond school. Moreover, the impact of bullying on educational attainment at age sixteen is found to be similar in magnitude to class size effects, which have attracted recent attention in the economics literature. Furthermore, in contrast to class size effects, the adverse influence of bullying on human capital attainment remains during adulthood. In addition, being bullied at school directly influences wages received during adulthood as well as indirectly influencing wages via educational attainment.
    Keywords: Bullying, Education, Harassment, Human Capital.
    JEL: J24 Z12
    Date: 2005–08
  2. By: Eric V. Edmonds (Dartmouth College NBER and IZA); Nina Pavcnik (Dartmouth College NBER and CEPR); Petia Topalova (International Monetary Fund)
    Abstract: Do the short and medium term adjustment costs associated with trade liberalization influence schooling and child labor decisions? We examine this question in the context of India's 1991 tariff reforms. Overall, in the 1990s, rural India experienced a dramatic increase in schooling and decline in child labor. However, communities that relied heavily on employment in protected industries before liberalization do not experience as large an increase in schooling or decline in child labor. The data suggest that this failure to follow the national trend of increasing schooling and diminishing work is associated with a failure to follow the national trend in poverty reduction. Schooling costs appear to play a large role in this relationship between poverty, schooling, and child labor. Extrapolating from our results, our estimates imply that roughly half of India's rise in schooling and a third of the fall in child labor during the 1990s can be explained by falling poverty and therefore improved capacity to afford schooling.
    Keywords: schooling, child labor, literacy, trade liberalization, India
    JEL: J24 O15 J22 J13
    Date: 2007–02
  3. By: Eleonora Patacchini (University of Rome "La Sapienza"); Yves Zenou (Research Institute of Industrial Economics, GAINS, CEPR and IZA)
    Abstract: We develop a model that analyzes the impact of residential neighborhood and parents’ involvement in education on children’s educational attainment and test it using the UK National Child Development Study. We find that the better the quality of the neighborhood, the higher the parents’ involvement in children’s education, indicating cultural complementarity. For high-educated parents, the child’s educational attainment is more affected by the parents’ involvement than by the neighborhood quality while, for low-educated parents, the neighborhood quality seems to play the major role.
    Keywords: education, cultural transmission, cultural substitution, peer effects
    JEL: I21 J13 J24
    Date: 2007–02
  4. By: Kerstin Enflo; Jörg Baten
    Abstract: We employ a non-parametrical approach to growth accounting (Data Envelopment Analysis, DEA) to disentangle the proximate sources of labour productivity growth in 41 nations between 1929 and 1950 by decomposing productivity growth into four components: technological change; efficiency catch-up (movements towards the production frontier), capital accumulation and human capital accumulation. We show that efficiency catch-up generally explains productivity growth, whereas technological change and factor accumulation were limited and distorted by the effects of war. War clearly hampered efficiency. Moreover, an unbalanced ratio of human capital to physical capital (a gap to the technological leader) was crucial for efficiency catching-up.
    Keywords: DEA, growth accounting, productivity, interwar period
    JEL: N10 N40 O47
  5. By: P Tridico
    Abstract: The aim of this paper is to analyse regional difference yield in terms of Human Development (HD) in Poland. During transition, western Polish regions grew more than eastern regions, and differences in terms of GDP per capita are evident. Nevertheless, higher GDP per capita in the West did not produce a higher level of non-income dimension indicators (i.e., Education and Life expectancy). On the contrary eastern regions, although they have a lower level of GDP per capita, have a higher level of non-income dimension indicators. This contradicts a neoclassical argument of considering HD as a proxy of GDP per capita. GDP growth is not a sufficient condition for HD. Along with GDP growth HD requires investments in social dimensions.
    Keywords: Regional Disparities, Human Development, Transition economics, Poland.
    JEL: R11 I10 I21 P25
  6. By: Marcelo Soto (Instituto de Análisis Económico, Barcelona)
    Abstract: Empirical studies find that changes in schooling are not correlated with changes in per capita income. Similarly, the estimation in levels also produces minor coefficients for years of schooling. Low social returns and measurement error in educational variables have been invoked as possible explanations for such findings. This paper shows that collinearity between physical and human capital stocks seriously undermines the ability of educational indicators to display significance in panel data estimates. On top of that, failure to cope with endogeneity has produced biased estimates. As opposed to the earlier empirical literature, the social return on schooling is positive and significant, but no Lucas-type externalities are observed. Finally, the quality of education emerges as a significant determinant of heterogeneity in social returns across countries.
    Keywords: human capital, education, income growth, GMM estimation.
    JEL: J10 O10 O40
    Date: 2006–09
  7. By: Uschi Backes-Gellner (Institute for Strategy and Business Economics, University of Zurich); Johannes Mure (Institute for Strategy and Business Economics, University of Zurich); Simone Tuor (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: Although participation in continuing vocational training is often found to be associated with considerable individual benefits, a puzzlingly large number of people still do not take part in training. We argue that in order to solve the puzzle it is important to take selection effects into account when studying the returns to education. It has already been established that training participants and non-participants differ in unobservable charac-teristics and therefore self-select into training or not. We show that even non-participants cannot be treated as a homogeneous group: there are individuals who never take part in training (permanent non-participants) and individuals currently not taking part (occasional non-participants). Using a unique data set of non-participants we sepa-rate and compare those two groups. We find that, if they participated, permanent non-participants would have higher costs than occasional non-participants and the benefits associated with their current jobs would be lower. However, even permanent non-participants would benefit from participation in terms of improved prospects on the la-bor market. The results indicate that permanent non-participants either misperceive fu-ture developments or suffer from an exceptionally high discount rate, which in turn leads in their view to a negative cost-benefit ratio for training.
    Keywords: Further training; Investing in human capital; Costs-benefit ratio
    JEL: M5 M12 M53
    Date: 2006–08
  8. By: Massimiliano Bratti (University of Milan and IZA); Daniele Checchi (University of Milan and IZA); Antonio Filippin (University of Milan and IZA)
    Abstract: In this paper we investigate the existence and the size of territorial differences in Italian students’ mathematical competencies. Our analysis benefits from a new data set that merges the 2003 wave of the OECD Programme for International Student Assessment (PISA) with territorial data collected from several statistical sources and with administrative school data collected by the Italian Ministry of Education. We consider three different groups of educational inputs: individual characteristics (mainly family background), school types and available resources, and territorial features related to labour market, cultural resources and aspirations. In addition to the standard gradient represented by parental education and occupation, we find that student sorting across school types also plays a significant role. Among the local factors measured at province level, we find a significant impact of buildings maintenance and employment probabilities. When accounting for territorial differences, we find that most of the North-South divide (75%) is accounted for by differences in endowments, while the local school production functions account for the remaining fraction.
    Keywords: education, PISA, students, territorial differences
    JEL: J21 J24 H52
    Date: 2007–02
  9. By: Hiroshi Sato (Hitotsubashi University, Tokyo); Li Shi (Beijing Normal University)
    Abstract: This paper examines the determinants of intergenerational correlation of education in rural China by using a data from a large survey of households. Three generations who completed education during the period from pre-1949 to the beginning of the 2000s are included. The focus is on the influence of family class status (chengfen) on offspring education. Our investigation suggests that family class status is still important for the intergenerational transmission of education. The offspring of landlord/rich peasant families are more likely to achieve higher educational attainment, even though parental education, family wealth, and other family characteristics are the same. The unique determinant of the intergenerational transmission of education in the postreform era is found to be an education-oriented family culture, created as an intergenerational cultural rebound against class-based social discrimination during the Maoist era. We have also found that the cultural reaction is a combination of class-specific effects with cohort-specific effects.
    Keywords: education, intergenerational correlation, social class, social discrimination, family culture
    JEL: D31 J24 N35 O15
    Date: 2007–02
  10. By: Christian Belzil (GATE CNRS)
    Abstract: This papers contains a survey of the recent literature devoted to the returns to schooling within a dynamic structural framework. I present a historical perspective on the evolution of the literature, from early static models set in a selectivity framework (Willis and Rosen, 1979) to the recent literature, stimulated by Keane and Wolpin (1997), and which uses stochastic dynamic programming techniques. After reviewing the literature thoroughly, I compare the structural approach with the IV (experimental) approach. I present their commonalities and I also discuss their fundamental di8erences. To get an order of magnitude, most structural estimates reported for the US range between 4% and 7% per year. On the other hand, IV estimates between 10% and 15% per year are often reported. The discrepancy prevails even when comparable (if not identical) data sets are used. The discussion is focussed on understanding this divergence. The distinction between static and dynamic model specifications is a recurrent theme in the analysis. I argue that the distinction between the IV approach and the structural approach may be coined in terms of a trade o8 between behavioral and statistical assumptions. For this reason, and unless one has very specific knowledge of the true data generating process, it is neither possible, nor sensible, to claim which approach to estimation is more flexible. More precisely, I show that structural and IV approaches differ mainly at the level of i) the compatibility of the underlying models with truly dynamic behavior, ii) the role of heterogeneity in ability and tastes, iii) the consideration of post-schooling opportunities, and (iv) the specification (and interpretation) of the Mincer wage equation.
    Keywords: ability bias, dynamic self-selection, human capital, IV estimations, natural experiments, returns to education
    JEL: J2 J3
    Date: 2006–10
  11. By: Eric V. Edmonds (Dartmouth College, NBER and IZA)
    Abstract: In recent years, there has been an astonishing proliferation of empirical work on child labor. An Econlit search of keywords "child lab*r" reveals a total of 6 peer reviewed journal articles between 1980 and 1990, 65 between 1990 and 2000, and 143 in the first five years of the present decade. The purpose of this essay is to provide a detailed overview of the state of the recent empirical literature on why and how children work as well as the consequences of that work. Section 1 defines terms commonly used in the study of child time allocation and provides a descriptive overview of how children spend their time in low income countries today. Section 2 reviews the case for attention to the most common types of work in which children participate, focusing on that work's impact on schooling, health, as well as externalities associated with that work. Section 3 considers the literature on the determinants of child time allocation such as the influence of local labor markets, family interactions, the net return to schooling, and poverty. Section 5 discusses the limited evidence on different policy options aimed at influencing child labor. Section 6 concludes by emphasizing important research questions requiring additional research such as child and parental agency, the effectiveness of child labor policies, and the determinants of participation in the "worst forms" of child labor.
    Keywords: child labor, human capital, time allocation, schooling
    JEL: J13 J22 O15
    Date: 2007–02
  12. By: Siegfried K. Berninghaus; Werner Güth; Christian Hoppe; Christian Paul
    Abstract: Two firms, firm A in country A and firm B in country B, compete in hiring two types of workers. Type 1-workers would be less productive when working abroad whereas type 2-workers are equally productive when working abroad or at home. Employers compete by offering employment contracts for both types of workers as well as for workers in both countries. Hiring determines output and thus the sales on the homogenous international sales market. We show that the scenario with firm A(B) hiring only workers from country A(B) is an equilibrium, i.e., there exists a parameter region with this equilibrium outcome. For our experiment with a specific parameter constellation we want to explore some qualitative hypotheses, related to this equilibrium scenario.
    Date: 2007–03
  13. By: Stephen L. Ross (University of Connecticut); Yves Zenou (Research Institute of Industrial Economics, Stockholm, GAINS, CEPR and IZA)
    Abstract: Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for behavioral substitution between leisure time at home and effort at work. In equilibrium, residing at a location with a long commute affects the time available for leisure at home and therefore affects the trade-off between effort at work and risk of unemployment. This model implies an empirical relationship between expected commutes and labor market outcomes, which is tested using the Public Use Microdata sample of the 2000 U.S. Decennial Census. The empirical results suggest that efficiency wages operate primarily for blue collar workers, i.e. workers who tend to be in occupations that face higher levels of supervision. For this subset of workers, longer commutes imply higher levels of unemployment and higher wages, which are both consistent with shirking and leisure being substitutable.
    Keywords: efficiency wage, leisure, urban unemployment
    JEL: J41 R14
    Date: 2007–02

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