nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒08‒14
sixteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. The Effects of Human Capital on Output Growth in ICT Industries: Evidence from OECD Countries By Gavin Murphy; Iula Traistaru-Siedshlag
  2. Labour Market Effects of Polytechnic Education Reform: The Finnish Experience By Böckerman, Petri; Hämäläinen, Ulla; Uusitalo, Roope
  3. Investing in Indonesia’s Education: Allocation, Equity, and Efficiency of Public Expenditures By Arze del Granado, Javier; Fengler, Wolfgang; Ragatz, Andrew; Yavuz, Elif
  4. Many Children Left Behind? Textbooks and Test Scores in Kenya By Paul Glewwe; Michael Kremer; Sylvie Moulin
  5. Persistence of the School Entry Age Effect in a System of Flexible Tracking By Patrick A. Puhani; Andrea M. Weber
  6. Institutional effects as determinants of learning outcomes : exploring state variations in Mexico By Alvarez, Jesus; Moreno, Vicente Garcia; Patrinos, Harry Anthony
  7. Enhancing Incentives to Improve Performance in the Education System in France By Paul O'Brien
  8. "Man Enough To Do It"? Girls and Non-Traditional Subjects in Lower Secondary Education By Emer Smyth; Merike Darmody
  9. Sustained Output Growth Under Uncertainty: A Simple Model With Human Capital By Dimitrios Varvarigos
  10. A Note on Human Capital and the Feldstein-Horioka Puzzle By Katsimi, Margarita; Moutos, Thomas
  11. Managing Term-Time Employment and study in Ireland By Merike Darmody; Emer Smyth
  12. Stochastic labour market shocks, labour market programmes, and human capital formation: a theoretical and empirical analysis By Michael Lechner; Rosalia Vazquez-Alvarez
  13. Human Resource Management: Some Vital Considerations By Mishra, SK
  14. Education and wage differentials by gender in Italy By Tindara ADDABBO; Donata Favaro
  15. A Panel Data Analysis of the Brain Gain By Michel, BEINE; Cecily, DEFOORT; FrŽdŽric, DOCQUIER
  16. Production offshoring and the skill composition of Italian manufacturing firms A quasi-experimental analysis By R. Antonietti; D. Antonioli

  1. By: Gavin Murphy (Economic and Social Research Institute (ESRI)); Iula Traistaru-Siedshlag (Economic and Social Research Institute (ESRI))
    Abstract: Information and communication technologies (ICT) play a central role in the transition to knowledge - based economies. In this paper we analyse the effects of human capital in fostering output growth in ICT manufacturing and services using data from a sample of twenty OECD countries over the period 1980-2002. We focus on within country between industry differences and estimate a system of simultaneous equations to account for simultaneous effects of human capital on physical investment and output growth. The results of our econometric analysis suggest that countries with a high human capital stock experienced faster output growth in ICT producing manufacturing and ICT using services. Also, in countries with high human capital improvement over the analysed period output grew relatively faster in ICT producing manufacturing industries. Furthermore, we find that past country level educational attainment reflected in the human capital stock and human capital accumulation over the analysed period had a direct positive and significant effect on physical capital investment. Our findings indicate that in developed countries human capital is an important factor driving the ICT industries growth.
    Keywords: Human capital, ICT industries, Economic growth
    JEL: E62 F43 O33
    Date: 2007–03
  2. By: Böckerman, Petri; Hämäläinen, Ulla; Uusitalo, Roope
    Abstract: This paper evaluates the labour market effects of the introduction of the polytechnic education system in Finland. The reform transformed former vocational colleges gradually into polytechnics. Since the timing of the reform differed across schools, we can control for macroeconomic changes by comparing the performance of the polytechnic graduates to the performance of vocational college graduates who graduated at the same time, and to control for both time and the school fixed effects at the same time. We discover that both employment levels and earnings of post-reform graduates are significantly higher when compared to pre-reform graduates from the same schools. The effects of the polytechnic reform differ between the three largest fields. In the field of business and administration the effects from the reform have been overwhelmingly positive. This is in accordance with the fact that the polytechnic reform extended the length of education mostly in this field.
    Keywords: educational economics; human capital; salary wage differentials
    JEL: I21 I23
    Date: 2007–08–09
  3. By: Arze del Granado, Javier; Fengler, Wolfgang; Ragatz, Andrew; Yavuz, Elif
    Abstract: What is the current level and main characteristics of public education spending in Indonesia? Is education spending insufficient? Is education spending efficient and equitable? This study reports the first account of Indonesia’s aggregated (national and sub-national) spending on education, as well as the economic and sub-functional (by programs) composition of education expenditures. It presents estimations of the expected (average) level of education spending for a country with similar economic and social characteristics. It sheds light on efficiency and equity of education spending by presenting social rates of return by level of education, an assessment of the adequacy of current teacher earnings relative to other paid workers, the distribution of teachers across urban, rural, and remote regions, and the determinants of education enrollment. It concludes that the current challenges in Indonesia are not anymore defined by the need to increase spending on the supply side, but rather to improve the quality of education services, and to improve the efficiency of education expenditures by re-allocating teachers to undersupplied regions and re-adjusting the spending mix within and between education programs of future additional spending in the sector. The study finds that poverty and student-aged labor are also significant constraints to education enrollment, stressing the importance of policies aimed to address demand-side factors affecting education access in Indonesia.
    Keywords: education Indonesia; expenditures education Indonesia; Indonesia's education; quality education; efficiency of education expenditures; equity of education expenditures; rates of return; teacher wages indonesia; education 20% rule Indonesia
    JEL: H41 I28 I22
    Date: 2007–07
  4. By: Paul Glewwe; Michael Kremer; Sylvie Moulin
    Abstract: A randomized evaluation suggests that a program which provided official textbooks to randomly selected rural Kenyan primary schools did not increase test scores for the average student. In contrast, the previous literature suggests that textbook provision has a large impact on test scores. Disaggregating the results by students? initial academic achievement suggests a potential explanation for the lack of an overall impact. Textbooks increased scores for students with high initial academic achievement and increased the probability that the students who had made it to the selective final year of primary school would go on to secondary school. However, students with weaker academic backgrounds did not benefit from the textbooks. Many pupils could not read the textbooks, which are written in English, most students? third language. The results are consistent with the hypothesis that the Kenyan education system and curricular materials are oriented to the academically strongest students rather than to typical students. More generally, many students may be left behind in societies that combine 1) a centralized, unified education system; 2) the heterogeneity in student preparation associated with rapid expansion of education; and 3) disproportionate elite power.
    JEL: C93 I20 O15 P16
    Date: 2007–08
  5. By: Patrick A. Puhani; Andrea M. Weber
    Abstract: In Germany, the streaming of students into an academic or nonacademic track at age 10 can be revised at later stages of secondary education. To investigate the importance of such revisions, we use administrative data on the student population in the German state of Hessen to measure the persistence of school entry age’s impact on choice of secondary school track. Based on exogenous variation in the school entry age by birth month, we obtain regression discontinuity estimates for different cohorts and grades up to the end of secondary education. We show that the effect of original school entry age on a student’s later attending grammar school disappears exactly at the grade level in which educational institutions facilitate track modification.
    Keywords: Education, identification, regression discontinuity design, instrumental variables, relative maturity
    JEL: I21 I28 J24
    Date: 2007–07
  6. By: Alvarez, Jesus; Moreno, Vicente Garcia; Patrinos, Harry Anthony
    Abstract: This paper uses the OECD ' s Program for International Student Assessment student-level achievement database for Mexico to estimate state education production functions, controlling for student characteristics, family background, home inputs, resources, and institutions. The authors take advantage of the state-level variation and representative sample to analyze the impact of institutional factors such as state accountability systems and the role of teachers ' unions in student achievement. They argue that accountability, through increased use of state assessments, will improve learning outcomes. The authors also cast ligh t on the role of teachers ' unions, namely their strength through appointments to the school and relations with state governments. The analysis shows the importance of good relations between states and unions. Furthermore, it demonstrates that accountability systems are cost-effective measures for improving outcomes.
    Keywords: Tertiary Education,Education For All,Teaching and Learning,Secondary Education,Primary Education
    Date: 2007–07–01
  7. By: Paul O'Brien
    Abstract: The French education system has a mixed record. A generally very successful pre-school and primary school level contrasts with underfunded public universities with high dropout rates which exist alongside very successful higher education institutions for elites. Initial education, especially secondary education and the universities, along with labour market policies themselves, do not always succeed in improving labour market entry for a significant proportion of young people. Parts of the management of education have been decentralised, yet educational institutions themselves generally have a very restricted degree of autonomy. The system of performance measurement and incentives, at all levels of education, needs to be reviewed. This Working Paper relates to the 2007 OECD Economic Survey of France (, and is also available in French under the title “Renforcer les incitations à une meilleure performance du système éducatif en France”.
    Keywords: education, France
    JEL: H52 I2
    Date: 2007–08–01
  8. By: Emer Smyth (Economic and Social Research Institute (ESRI)); Merike Darmody (Economic and Social Research Institute (ESRI))
    Abstract: This article examines the processes influencing the choice of non-traditional subjects by girls in lower secondary education in the Republic of Ireland. In particular, we focus on the traditionally ‘male’ technological subjects, namely, Materials Technology (Wood), Metalwork and Technical Graphics. Analyses are based on detailed case-studies of twelve secondary schools, placing them in the context of national patterns of subject take-up. Strong gender differentiation persists in the take-up of these technological subjects. Commonalities are evident across schools in the way in which the subjects are constructed as ‘male’. However, some students, both female and male, actively contest these labels, and school policy and practice regarding subject provision and choice can make a difference to take-up patterns. It is argued that the persistent gendering of subjects has implications for the skills acquired by students, their engagement in education, and the education, training and career opportunities open to them on leaving school.
    Keywords: gender, subject choice, stereotyping, lower secondary education
    Date: 2007–05
  9. By: Dimitrios Varvarigos (Dept of Economics, Loughborough University)
    Abstract: In a model where agents use their labour/education choice to adjust their consumption profile over time, I show that the impact of uncertainty on growth depends, critically, on agents’ attitudes towards risk, reflected by the coefficient of relative risk aversion. In this respect, the well known result from the literature on ‘saving under uncertainty’ can be extended into a broader context, whereby the intertemporal profile of consumption is determined via human capital accumulation rather than saving and physical capital investment.
    Keywords: Growth, Uncertainty
    JEL: O41
    Date: 2007–08
  10. By: Katsimi, Margarita; Moutos, Thomas
    Abstract: In this paper we reexamine the Feldstein-Horioka finding of limited international capital mobility by using a broader view (i.e., including human capital) of investment and saving. We find that the Feldstein-Horioka result is impervious to this change.
    Keywords: human capital, current account, investment-saving correlation, capital mobility
    JEL: E2 F2 I2 Q4
    Date: 2007
  11. By: Merike Darmody (Economic and Social Research Institute (ESRI)); Emer Smyth (Economic and Social Research Institute (ESRI))
    Abstract: An increasing amount of research now relates to full-time higher education students who work part-time during their study. However, little is known about this issue in the Irish context, despite the fact that the latter provides an interesting case-study due to its unprecedented economic growth in recent years and subsequent changes in the labour market. This paper attempts to address this gap in research and reports on a postal survey carried out among 3,900 higher education students. It aims to establish the profile of full-time higher education students engaged in part-time work during term-time. It also explores the motivation for engaging in paid work and possible implications of work-load on levels of life satisfaction. It is argued in this paper that inadequate policy attention to the changing profile of higher education students, their work-load and needs risks reinforcing inequalities among students.
    Keywords: higher education, part-time employment, survey, Ireland, logistic
    Date: 2007–03
  12. By: Michael Lechner; Rosalia Vazquez-Alvarez
    Abstract: This paper develops a life-cycle model of labour supply that captures endogenous human capital formation allowing for individual’s heterogeneous responses to stochastic labour market shocks. The shocks determines conditions in the labour market and sort individuals into three labour market regimes; employment, unemployment with and unemployment without participation in labour market programmes. The structural model entails time independent stochastic shocks that have transitory effects on monetary returns while the effect on human capital formation may be permanent. The permanent effect may justify the existence of active labour market programmes if these programmes imply non-depreciating human capital and human capital depreciation is detected for the non-participant unemployed. Using several years of the Swiss Labour Force Survey (SAKE, 1991 – 2004) the empirical section compares the dynamic formation of human capital between labour market regimes. The results are consistent with the assumptions of the structural model and suggest human capital depreciation for unemployment without programme participation. They further show that labour programmes may act as a buffer to reduce human capital loss while unemployed.
    Keywords: Human capital formation, life-cycle labour supply models, active labour market policies, search activities, productivity shocks, unemployment
    JEL: D31 D91 J24 J68
    Date: 2007–07
  13. By: Mishra, SK
    Abstract: The paper discusses how and why the theories of neo-classical economics are inadequate to provide a framework to human resource management and therefore must give way to dynamic gradual optimization procedure based on the principles of bounded rationality and satisficing behaviour in dealing with the problems of an adaptive complex system of business organization. It also widens the scope of human resource management to include crowd-sourcing.
    Keywords: Human resource management; bounded rationality; adaptive complex system; satisficing behaviour; dynamic gradual optimization; crowd-sourcing
    JEL: L20 J50 J20
    Date: 2007–08–04
  14. By: Tindara ADDABBO; Donata Favaro
    Abstract: The most recent literature on wage differentials highlights the need to evaluate the wage gap at different points of the wage distribution rather than at the average value alone. In this work we use quantile regressions and an adaptation of the procedure suggested by Machado and Mata (2005) to derive the predicted and counterfactual female wage distributions and to evaluate the extension of the unexplained part of the wage gap. We use data from the last available cross-section of the European Community Household Panel (2001). We show that in Italy the wage gap due to gender differences in the rewards to productive characteristics is higher in correspondence with the extremes of the female wage distribution, suggesting the presence of strong glass ceiling and sticky floor patterns. Controlling for different educational levels, we find that low-educated women suffer a higher unexplained wage gap along the whole distribution. However, we detect a strong sticky floor effect among low-educated women and some evidence of a glass ceiling pattern among highly-educated female workers.
    Keywords: Human capital, Gender wage gap, Discrimination
    JEL: J71
    Date: 2007–03
  15. By: Michel, BEINE; Cecily, DEFOORT (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); FrŽdŽric, DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)
    Abstract: This paper casts the Belgian Great Depression of the 1930s within a dynamic stochastic general equilibrium (DSGE) framework. Results show that a total factor productivity shock within a standard real business cycle model is unsatisfactory. Introducing war expectations in the baseline model produces little improvement. Given the evidence on sticky wages put forward by historians, it shows that a simple DGSE model with sticky wages ˆ la Taylor improves on the result.
    Keywords: human capital; convergence; brain drain
    JEL: O15 O40 F22 F43
    Date: 2007–08–07
  16. By: R. Antonietti; D. Antonioli
    Date: 2007–05

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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