nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒05‒12
ten papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Human Capital Spillovers and Economic Performance in the Workplace in 2004: Some British Evidence By Renuka Metcalfe; Peter J. Sloane
  2. Education and Economic Growth: A Case Study of Australia By Sawami Matsushita; Abu Siddique; Margaret Giles
  3. Returns to education in the economic transition : a systematic assessment using comparable data By Tiongson, Erwin R.; Paternostro , Stefano; Flabbi, Luca
  4. Want Economic Growth with Good Quality Institutions? Spend on Education By Mamoon, Dawood; Murshed, Mansoob
  5. Understanding the Evolution of the U.S. Wage Distribution: A Theoretical Analysis By Fatih Guvenen; Burhanettin Kuruscu
  6. Gender Differences in Early-Career Wage Growth By Sami Napari
  7. How Many U.S. Jobs Might Be Offshorable? By Alan S. Blinder
  8. College Education and Wages in the U.K.: Estimating Conditional Average Structural Functions in Nonadditive Models with Binary Endogenous Variables By Tobias J. Klein
  9. The Rate of Learning-by-Doing: Estimates from a Search-Matching Model By Julien Prat
  10. Social capital, rules, and institutions: a cross-country investigation By Thomas Farole; Andrés Rodríguez-Pose; Michael Storper

  1. By: Renuka Metcalfe (WELMERC, University of Wales Swansea); Peter J. Sloane (WELMERC, University of Wales Swansea and IZA)
    Abstract: This paper considers the impact of education and training on both individual and co-worker pay and establishment performance using the matched employer-employee data in WERS 2004, the panel dataset 1998-2004 and the new Financial Performance Questionnaire. This enables us to assess the impact of workplace education and training using both subjective (managers’ assessments) and objective data on productivity, profits and establishment survival. We establish that workplace education and training can have positive impacts on establishment financial performance, survival and growth. In contrast to extant studies, it was found that the square and the interaction between own and co-workers years of training also have a positive and significant impact on hourly pay. We find evidence indicating that establishments with 60% or more of workers trained have a higher establishment performance and also have a powerful impact on the likelihood of establishment survival.
    Keywords: human capital, spillovers, education, training, productivity, profitability, establishment survival
    JEL: I2 J4
    Date: 2007–05
  2. By: Sawami Matsushita (Centre for Labour Market Research, The University of Western Australia); Abu Siddique (Business School, The University of Western Australia); Margaret Giles (Business School, The University of Western Australia)
    Abstract: The purpose of this paper is to measure the contribution of education to growth in per capita real GDP in Australia over the period 1969-2003 using the growth accounting method. Also estimated is the contribution of total factor productivity to growth. Over the period, per capita real GDP in Australia increased by 1.9 percent per annum. Of this, about 31 percent was contributed by education. This finding has important implications for policy makers in Australia. For example, in order to promote economic growth in coming years, access to post compulsory education, particularly vocational education and training and higher education, for all Australians should be made easier and cheaper. This contradicts recent trends at the federal level towards increasing the student share of education costs.
    Keywords: Growth Accounding, Education, Economic Growth
    JEL: O47 O56 I29
    Date: 2006
  3. By: Tiongson, Erwin R.; Paternostro , Stefano; Flabbi, Luca
    Abstract: This paper examines the assertion that returns to schooling increase as an economy transitions to a market environment. This claim has been difficult to assess as existing empirical evidence covers only a few countries over short time periods. A number of studies find that returns to education increased from the " pre-transition " period to the " early transition " period. It is not clear what has happened to the skills premium through the late 1990s, or the period thereafter. The authors use data that are comparable across countries and over time to estimate returns to schooling in eight transition economies (Bulgaria, Czech Republic, Hungary, Latvia, Poland, Russia, Slovak Republic, and Slovenia) from the early transition period up to 2002. In the case of Hungary, they capture the transition process more fully, beginning in the late 1980s. Compared to the existing literature, they implement a more systematic analysis and perform more comprehensive robustness checks on the estimated returns, although at best they offer only an incomplete solution to the problem of endogeneity. The authors find that the evidence of a rising trend in returns to schooling over the transition period is generally weak, except in Hungary and Russia where there have been sustained and substantial increases in returns to schooling. On average, the estimated returns in the sample are comparable to advanced economy averages. There are, however, significant differences in returns across countries and these differentials have remained roughly constant over the past 15 years. They speculate on the likely institutional and structural factors underpinning these results, including incomplete transition and significant heterogeneity and offsetting developments in returns to schoolin g within countries.
    Keywords: Education For All,Primary Education,Teaching and Learning,Education Reform and Management,Access & Equity in Basic Education
    Date: 2007–05–01
  4. By: Mamoon, Dawood; Murshed, Mansoob
    Abstract: The purpose of this paper is to compare the role of human capital accumulation measured by number of years of schooling with the relative contribution of institutional capacity to prosperity. We employ several concepts of institutional quality prevalent in the literature. We discover that developing human capital is as important as superior institutional functioning for economic wellbeing. Indeed, the accumulation of human capital stocks via increased education might lead to improved institutional functioning, and the utilisation of policies like trade liberalisation.
    Keywords: Growth; Institutions; Human Capital.
    JEL: I28 P36 I21
    Date: 2007–05
  5. By: Fatih Guvenen; Burhanettin Kuruscu
    Abstract: In this paper we present an analytically tractable overlapping generations model of human capital accumulation, and study its implications for the evolution of the U.S. wage distribution from 1970 to 2000. The key feature of the model, and the only source of heterogeneity, is that individuals differ in their ability to accumulate human capital. Therefore, wage inequality results only from differences in human capital accumulation. We examine the response of this model to skill-biased technical change (SBTC) theoretically. We show that in response to SBTC, the model generates behavior consistent with several features of the U.S. data including (i) a rise in overall wage inequality both in the short run and long run, (ii) an initial fall in the education premium followed by a strong recovery, leading to a higher premium in the long run, (iii) the fact that most of this fall and rise takes place among younger workers, (iv) a rise in within-group inequality, (v) stagnation in median wage growth (and a slowdown in aggregate labor productivity), and (vi) a rise in consumption inequality that is much smaller than the rise in wage inequality. These results suggest that the heterogeneity in the ability to accumulate human capital is an important feature for understanding the effects of SBTC, and interpreting the transformation that the U.S. economy has gone through since the 1970's.
    JEL: E21 E24 J24 J31
    Date: 2007–05
  6. By: Sami Napari
    Abstract: In Finnish manufacturing, the gender wage gap more than doubles during the first ten years in the labor market. This paper studies the factors contributing to the gender gap in early-career wage growth. The analysis shows that the size of the gender gap in wage growth varies with mobility status the gap being much higher when changing employers compared to within-firm wage growth. Several explanations for the gender gap in wage growth based on human capital theory and theory of compensating wage differentials are considered. However, most of the gap in wage growth remains unexplained. Further analysis documents that the female penalty in wage growth increases significantly as we move along the conditional wage growth distribution with a sharp acceleration in the gap at the top of the distribution.
    Keywords: gender wage gap, wage growth, mobility
    JEL: J24 J31 J6 J7
    Date: 2007–05–07
  7. By: Alan S. Blinder (Princeton University)
    Abstract: Using detailed information on the nature of work done in over 800 BLS occupational codes, this paper ranks those occupations according to how easy/hard it is to offshore the work— either physically or electronically. Using that ranking, I estimate that somewhere between 22% and 29% of all U.S. jobs are or will be potentially offshorable within a decade or two. (I make no estimate of how many jobs will actually be offshored.) Since my rankings are subjective, two alternatives are presented—one is entirely objective, the other is an independent subjective ranking. It is found that there is little or no correlation between an occupation’s “offshorability” and the skill level of its workers (as measured either by educational attainment or wages). However, it appears that, controlling for education, the most highly offshorable occupations were already paying significantly lower wages in 2004.
    Date: 2007–03
  8. By: Tobias J. Klein (University of Mannheim and IZA)
    Abstract: We propose and implement an estimator for identifiable features of correlated random coefficient models with binary endogenous variables and nonadditive errors in the outcome equation. It is suitable, e.g., for estimation of the average returns to college education when they are heterogeneous across individuals and correlated with the schooling choice. The estimated features are of central interest to economists and are directly linked to the marginal and average treatment effect in policy evaluation. The advantage of the approach that is taken in this paper is that it allows for non-trivial selection patterns. Identification relies on assumptions weaker than typical functional form and exclusion restrictions used in the context of classical instrumental variables analysis. In the empirical application, we relate wage levels, wage gains from a college degree and selection into college to unobserved ability. Our results yield a deepened understanding of individual heterogeneity which is relevant for the design of educational policy.
    Keywords: returns to college education, correlated random coefficient model, local instrumental variables, local linear regression
    JEL: C14 C31 J31
    Date: 2007–04
  9. By: Julien Prat (University of Vienna and IZA)
    Abstract: We construct and estimate by maximum likelihood an equilibrium search model where wages are set by Nash bargaining and idiosyncratic productivity follows a geometric Brownian motion. The proposed framework enables us to endogenize job destruction and to estimate the rate of learning-by-doing. Although the range of the observations is not independent of the parameters, we establish that the estimators satisfy asymptotic normality. The structural model is estimated using Current Population Survey data on accepted wages and employment durations. We show that it captures almost perfectly the joint distribution of wages and job spells. We find that the rate of learning-by-doing has an important positive effect on aggregate output and a small impact on employment.
    Keywords: job search, human capital, uncertainty, structural estimation
    JEL: J31 J64
    Date: 2007–05
  10. By: Thomas Farole (London School of Economics); Andrés Rodríguez-Pose (London School of Economics); Michael Storper (London School of Economics)
    Abstract: Research on the institutional foundations of economic development emphasizes either rulebound systems of exchange or informal bonds between individuals and within small groups. This corresponds to a classical division in social science, between the forces of society and those of community. This cleavage largely ignores their interactions, which are likely to shape the institutions that underpin economic development in decisive ways. This paper operationalises and tests how the interaction of the forces of community (or social capital) and society (or rules) impact three types of institutions: those involved in problem solving, those that shape microeconomic efficiency and those that influence social policy, across fiftyeight countries. We find that both community and society are important determinants across all institutional domains, and are in many cases mutually reinforcing, but that different specific aspects of community and society are most relevant to different institutional domains. Instrumental associationalism, whether formal or informal, and a robust rules environment are the most important determinants of positive institutional outcomes.
    Date: 2007–04–27

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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