nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒07‒07
seventeen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Mental Health in Childhood and Human Capital By Janet Currie; Mark Stabile
  2. Measuring a Society’s Knowledge Base By Khumalo, Bhekuzulu
  3. Human Capital and Economic Growth in the Potterian Economy By Avichai Snir; Daniel Levy
  4. Age-Dependent Skill Formation and Returns to Education: Simulation Based Evidence By Friedhelm Pfeiffer; Karsten Reuß
  5. On the optimal allocation of students when peer effect works: Tracking vs Mixing. By Marisa Hidalgo-Hidalgo
  6. Fundamental Determinants of School Efficiency and Equity: German States as a Microcosm for OECD Countries By Ludger Wößmann
  7. Intergenerational Mobility and Schooling Decisions in Germany and Italy: The Impact of Secondary School Tracks By Daniele Checchi; Luca Flabbi
  8. The Returns from Reducing Corruption: Evidence from Education in Uganda By Reinikka, Ritva; Svensson, Jakob
  9. Human Capital, Resource Constraints and Intergenerational Fairness By Simone Valente
  10. Access to Higher Education and Inequality: The Chinese Experiment By Xiaojun Wang; Belton M. Fleisher; Haizheng Li; Shi Li
  11. Intertemporal Labor Supply and Involuntary Unemployment By Peter Haan; Arne Uhlendorff
  12. Elite Dominance and Under-Investment in Mass Education: Disparity in the Social Development of the Indian States, 1960-92 By Sarmistha Pal; Sugata Ghosh
  13. Assessing the Incidence and Wage Effects of Over-Skilling in the Australian Labour Market By Kostas Mavromaras; Seamus McGuinness; Yin King Fok
  14. Aprender a aprender. Un método valioso para la educación superior. By Fernández Montt, René; Wompner, Fredy
  15. Sources of Lifetime Inequality By Mark Huggett; Gustavo Ventura; Amir Yaron
  16. Skilled Migration: The Perspective of Developing Countries By Frédéric Docquier; Hillel Rapoport
  17. The Economics, Technology and Neuroscience of Human Capability Formation By James J. Heckman

  1. By: Janet Currie; Mark Stabile
    Abstract: Although mental disorders are common among children, we know little about their long term effects on child outcomes. This paper examines U.S. and Canadian children with symptoms of Attention Deficit Hyperactivity Disorder (ADHD), depression, conduct disorders, and other behavioral problems. Our work offers a number of innovations. First we use large nationally representative samples of children from both countries. Second, we focus on "screeners" that were administered to all children in our sample, rather than on diagnosed cases. Third, we address omitted variables bias by estimating sibling-fixed effects models. Fourth, we examine a range of outcomes. Fifth, we ask how the effects of mental health conditions are mediated by family income and maternal education. We find that mental health conditions, and especially ADHD, have large negative effects on future test scores and schooling attainment, regardless of family income and maternal education.
    JEL: I1 I2
    Date: 2007–07
  2. By: Khumalo, Bhekuzulu
    Abstract: The quest to measure knowledge effectively will in no doubt lead to better knowledge policies of governments around the world in both developing and developed countries. This paper endeavours to seta sound theoretical base for measuring knowledge and does this by demonstrating that existing tools used by economists for measuring knowledge are largely self contradictory, they contradict existing theory. Knowledge to be measured effectively we must give knowledge its own units like weight and length have their own units, only then can we say how much knowledge one needs to carry out a particular task.
    Keywords: knowl; knowledge
    JEL: B41 O2 A1
    Date: 2006–10–09
  3. By: Avichai Snir; Daniel Levy
    Abstract: In this paper, we analyze the economic structure of the world of wizards as depicted in the Harry Potter books, which we term Potterian economy, and offer an economist’s perspective on it. We look at the economic structure of the life of Harry Potter and his co-actors as an economic model that governs the social organization of their economic activities. Our goal is to study and understand the internal consistency of the Potterian economic model and explore the relationships between its assumptions and the situation in the real world, as reflected in the Potterian model. To accomplish this, we focus on a textbook version of Solow’s economic growth model, which economists often use for studying the process of nations’ income determination and which serves as a standard benchmark for comparative economic growth studies. The analysis of the Potterian economy reveals that the Potterian model fits quite well the predictions of the economic growth model. We discuss potential implications of this finding, and explore the link between Potterian economic structure and performance in a broader context by discussing the link between economic institutions and economic outcomes.
    Date: 2007–02
  4. By: Friedhelm Pfeiffer (ZEW Mannheim, University of Mannheim and IZA); Karsten Reuß (ZEW Mannheim)
    Abstract: This study integrates findings from neurobiology and psychology on early childhood development and self-regulation to assess returns to education. Our framework for evaluating the distribution of age-specific returns to investments in cognitive and noncognitive skills is a lifecycle simulation model based on the technology of skill formation (Cunha and Heckman (2007)). Our findings illustrate the cumulative and synergetic nature of skill formation, the skill multiplier, and the shaping role early childhood has for human capital formation, growth and inequality.
    Keywords: intelligence, self-regulation, human capital, returns to education, life span
    JEL: J21 J24 J31
    Date: 2007–06
  5. By: Marisa Hidalgo-Hidalgo (Department of Economics, Universidad Pablo de Olavide)
    Abstract: The belief that the behaviour and outcomes of compulsory school students are affected by their peers has been important in shaping education policy. I analyze two polar education systems -tracking and mixing- and propose several criteria for their comparison. The system that maximizes average human capital, I find, depends crucially on the level of complementarity between peer effects and individuals' ability. I also find that when mean innate ability is much higher among the rich than among the poor, the system that best maximizes average human capital is mixing. However, there is no unanimity in the overall population so as to which system to choose.
    Keywords: Peer effects, Tracking, Mixing.
    JEL: D63 I28 J24
    Date: 2007–07
  6. By: Ludger Wößmann (University of Munich, Ifo Institute, CESifo and IZA)
    Abstract: Cross-country evidence on student achievement might be hampered by omitted country characteristics such as language or legal differences. This paper uses cross-state variation in Germany, whose sixteen states share the same language and legal system, but pursue different education policies. The same results found previously across countries hold within Germany: Higher mean student performance is associated with central exams, private school operation, and socio-economic background, but not with spending, while higher equality of opportunity is associated with reduced tracking. In a model that pools German states with OECD countries, these fundamental determinants do not differ significantly between the two samples.
    Keywords: student performance, PISA, Germany, education production function, institutional effects in schooling
    JEL: I28 L38 L33 H52 D02 D63 J24
    Date: 2007–06
  7. By: Daniele Checchi (University of Milan, CEPR and IZA); Luca Flabbi (Georgetown University, CHILD and IZA)
    Abstract: Intergenerational mobility in income and education is affected by the influence of parents on children’s school choices. Our focus is on the role played by different school systems in reducing or magnifying the impact of parents on children’s school choices and therefore on intergenerational mobility in general. We compare two apparently similar educational systems, Italy and Germany, to see how the common feature of separate tracks at Secondary School level may produce different impacts on children choices. Using data from a cross-country survey (PISA 2003), we study the impact of parental education on track choice, showing that the greater flexibility of the Italian system (where parents are free to choose the type of track) translates into greater dependence from parental background. These effects are reinforced when moving to post-secondary education, where the aspiration to go to college is affected not only by the school type but also (in the case of Italy only) by parental education. We then move to country-specific data sets (ISTAT 2001 for Italy and GSOEP 2001 and 2002 for Germany) to study the impact of family background on postsecondary school choices: we find this impact is greatly reduced when we control for secondary school tracks. Overall, we estimate large asymmetries by gender, with women’s behavior more independent from family backgrounds than men’s behavior.
    Keywords: secondary school tracks, education, intergenerational mobility
    JEL: I2 J1
    Date: 2007–06
  8. By: Reinikka, Ritva; Svensson, Jakob
    Abstract: What is the most effective way to increase primary school enrolment and student learning? We argue that innovations in governance of social services may yield the highest return since social service delivery in developing countries is often plagued by inefficiencies and corruption. We examine this hypothesis by exploiting an unusual policy experiment: A newspaper campaign in Uganda aimed at reducing capture of public funds by providing schools (parents) with information to monitor local officials' handling of a large education grant program. Combining survey and administrative data, we show that the campaign was successful, and the reduction in capture of funds had a positive effect on enrolment and student learning.
    Keywords: Corruption; Education; Newspaper campaign
    JEL: D73 I22 O12
    Date: 2007–06
  9. By: Simone Valente (CER-ETH - Center of Economic Research at ETH Zurich)
    Abstract: This paper studies an endogenous growth model with human capital, exhaustible resources, and overlapping generations. Under laissez-faire, higher study time reduces depletion rates by increasing the share of re- sources that present generations are willing to sell to successors. However, selfish behavior may prevent competitive sustained growth, and implement- ing utilitarian allocations generally induces optimal-and-sustainable paths. It is shown that: (i) raising study time and decreasing resource depletion are always complementary targets in optimal policies; (ii) growth effects are stronger the lower the optimal share of exploited resources; (iii) gener- ational welfare gains from optimal policies are delayed by faster depletion and, contrary to intuition, anticipated by lower social discount rates.
    Keywords: Endogenous Growth, Exhaustible Resources, Human Capital, Over- lapping Generations, Intergenerational Fairness, Sustainability
    JEL: H30 Q01 Q20
    Date: 2007–06
  10. By: Xiaojun Wang (University of Hawaii at Manoa); Belton M. Fleisher (Ohio State University and IZA); Haizheng Li (Georgia Tech); Shi Li (Chinese Academy of Social Sciences and IZA)
    Abstract: We apply a semi-parametric latent variable model to estimate selection and sorting effects on the evolution of private returns to schooling for college graduates during China’s reform between 1988 and 2002. We find that there were substantial sorting gains under the traditional system, but they have decreased drastically and become negligible in the most recent data. We take this as evidence of growing influence of private financial constraints on decisions to attend college as tuition costs have risen and the relative importance of government subsidies has declined. The main policy implication of our results is that labor and education reform without concomitant capital market reform and government support for the financially disadvantaged exacerbates increases in inequality inherent in elimination of the traditional "wage-grid".
    Keywords: return to schooling, selection bias, sorting gains, heterogeneity, financial constraints, comparative advantage, China
    JEL: J31 J24 O15
    Date: 2007–06
  11. By: Peter Haan (DIW Berlin and FU Berlin); Arne Uhlendorff (DIW Berlin and IZA)
    Abstract: In this paper we develop a model to consistently estimate the intertemporal labor supply behavior on the extensive margin (participation decision) and the intensive margin (working hours decision). In this framework we distinguish between voluntary non-participation and involuntary unemployment which is caused by labor market rationing and model the dynamics of labor supply by accounting for true state dependence and unobserved effects. Our approach follows the empirical literature on life cycle employment based on approximate decision rules. However, in contrast to previous studies, this framework allows us to test for true state dependence of voluntary non-participation, involuntary unemployment, full-time work and over-time work. Moreover, we derive consistent estimates of intertemporal labor supply elasticities over time and asses the bias of short- and long-run elasticities derived in a pure choice model of labor supply.
    Keywords: intertemporal labor supply behavior, transitions on the labor market, state dependence, involuntary unemployment
    JEL: C23 C25 J22 J64
    Date: 2007–06
  12. By: Sarmistha Pal (Brunel University and IZA); Sugata Ghosh (Brunel University)
    Abstract: Inter- and intra-state disparities in levels of literacy rates in India are striking, especially for the marginalized groups of women and low caste population. The present paper offers an explanation of this disparate development in terms of elite dominance that discriminates against the minority groups of people and systematically under-invests in mass education. We experiment with various indirect economic and political measures of elite dominance. Results based on the Indian state-level data for the period 1960-92 suggest that higher share of land held by the top 5% of the population (a) lowers spending on education as well as total developmental spending and (b) increases total non-developmental spending. Greater proportion of minority representations (female and low caste members) in the ruling government however fails to have any perceptible impact on development (including education) spending in our sample. This analysis also identifies land reform and poverty alleviation as two important policy instruments to erode the initial disadvantage of the marginalised people.
    Keywords: under-investment in education, discrimination against female and low-caste population, persistence of elite dominance, poverty, land reform
    JEL: I28 J15 O15 P48
    Date: 2007–06
  13. By: Kostas Mavromaras (MIAESR, University of Melbourne and IZA); Seamus McGuinness (MIAESR, University of Melbourne); Yin King Fok (MIAESR, University of Melbourne)
    Abstract: This paper examines the incidence and wage effects of over-skilling within the Australian labour market. It finds that approximately 30 percent of employees believed themselves to be moderately over-skilled and 11 percent believed themselves to be severely over-skilled. The incidence of skills mismatch varied little when the sample was split by education. After controlling for individual and job characteristics as well as the potential bias arising from individual unobserved heterogeneity, severely over-skilled workers suffer an average wage penalty of 13.3 percent with the penalty ranging from about 8 percent among vocationally qualified employees to over 20 percent for graduates.
    Keywords: skills, education
    JEL: J24 J31
    Date: 2007–06
  14. By: Fernández Montt, René; Wompner, Fredy
    Abstract: The following work corresponds to a directed test to analyze a learning strategy that receives the great protagonism within the different theories that today are known, where the analysis discusses and displays problematic as far as the valuation of this type of learning and its applicability in superior education. The educational experience and the exigencies that the modern world to the educative system brings with himself are the main arguments that guarantee this type of learning. Nevertheless the lack of appropriate instruments of evaluation and the difficulty to generate a common strategy to everything a group of dicentes are the main critics to this strategy. The discussion still is not settled and the paradigm of "Learning to learn" is every greater time. What if can affirm with certain security it is that circumstances in which exist this method of learning it offers better results than the other well-known methods. It is in this context in which obtaining to identify clearly the circumstances that favor this strategy turns out to be most important from this analysis.
    JEL: I20
    Date: 2007–01
  15. By: Mark Huggett; Gustavo Ventura; Amir Yaron
    Abstract: Is lifetime inequality mainly due to differences across people established early in life or to differences in luck experienced over the working lifetime? We answer this question within a model that features idiosyncratic shocks to human capital, estimated directly from data, as well as heterogeneity in ability to learn, initial human capital, and initial wealth -- features which are chosen to match observed properties of earnings dynamics by cohorts. We find that as of age 20, differences in initial conditions account for more of the variation in lifetime utility, lifetime earnings and lifetime wealth than do differences in shocks received over the lifetime. Among initial conditions, variation in initial human capital is substantially more important than variation in learning ability or initial wealth for determining how an agent fares in life. An increase in an agent's human capital affects expected lifetime utility by raising an agent's expected earnings profile, whereas an increase in learning ability affects expected utility by producing a steeper expected earnings profile.
    JEL: D31 D91 E21
    Date: 2007–07
  16. By: Frédéric Docquier (FNRS, IRES, Université Catholique de Louvain and IZA); Hillel Rapoport (Bar-Ilan University and EQUIPPE, Universités de Lille)
    Abstract: This chapter focuses on the effects of skilled migration on developing countries. We first present new evidence on the magnitude of the -brain drain- at the international level. Using a stylized model of education investment in a context of migration, we then survey the theoretical and empirical brain drain literature in a unified framework. Finally we use a particular specification of the model to discuss a number of policy issues from the perspective of developing countries.
    Keywords: migration, brain drain, economic development
    JEL: F22 J61
    Date: 2007–06
  17. By: James J. Heckman
    Abstract: This paper begins the synthesis of two currently unrelated literatures: the human capital approach to health economics and the economics of cognitive and noncognitive skill formation. A lifecycle investment framework is the foundation for understanding the origins of human inequality and for devising policies to reduce it.
    JEL: I1 J24
    Date: 2007–06

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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