nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒09‒09
sixteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Human Capital and Successful Academic Spin-Off By Bettina Müller
  2. Measuring educational inequalities:A method and an application to Albania By Nathalie Picard; François-Charles Wolff
  3. Investing in Indonesia ' s education : allocation, equity, and efficiency of public expenditures By Yavuz, Elif; Ragatz, Andy; Fengler, Wolfgang; Arze del Granado, F. Javier
  4. Educational standards in private and public schools By Giorgio Brunello; Lorenzo Rocco
  5. The Mincer Human Capital Model in Pakistan: Implications for Education Policy By Abbas, Qaisar; Foreman-Peck, James
  6. The E¤ect of Information Technology and Human Capital on Economic Growth By Ketteni Elena; Mamuneas Theofanis; Stengos Thanasis
  7. Imperfect information, self-selection and the market for higher education By Tali Regev
  8. The International Literature on Skills Training and the Scope for South African Application By Sean Archer
  9. A large scale experiment: wages and educational expansion in France By Marc Gurgand; Eric Maurin
  10. Setas – A Vehicle for the Skills Revolution? By Renee Grawitzky
  11. Pensions, Education and Life Expectancy By Michael Gorski; Tim Krieger; Thomas Lange
  12. The Role of Religious and Social Organizations in the Lives of Disadvantaged Youth By Rajeev Dehejia; Thomas DeLeire; Erzo F.P. Luttmer; Joshua Mitchell
  13. The Returns to Continuous Training in Germany: New Evidence from Propensity Score Matching Estimators By Muehler, Grit; Beckmann, Michael; Schauenberg, Bernd
  14. Culture as Learning: The Evolution of Female Labor Force Participation over a Century By Raquel Fernandez
  15. "Inequality of Life Chances and the Measurement of Social Immobility" By Jacques Silber; Olivier Giovannoni; Amedeo Spadaro
  16. Low-skilled Jobs: The French Strategy By Henri Sterdyniak

  1. By: Bettina Müller (Centre for European Economic Research)
    Abstract: Academic spin-offs are one way in which employability of university graduates is reflected. Using the ZEW spinoff-survey, this paper studies empirically the impact of human capital on the success of academic spin-offs founding in knowledge and technology intensive sectors. The focus is thereby on the composition of human capital which is described according to whether or not the founders have studied several subjects and whether or not they all come from the same research establishment. Additionally the impact of having founded as a team is analyzed. Success is measured by employment growth. The findings suggest that it is advantageous to found within a team, but that the human capital composition both for single entrepreneurs and team foundations is rather irrelevant.
    Keywords: Higher Education , Human Capital , Entrepreneurship , Spin-off
    JEL: C12 L25 M13
    Date: 2006–12–20
  2. By: Nathalie Picard (THEMA, Université de Cergy-Pontoise, France and INED, Paris, France.); François-Charles Wolff (LEN, Université de Nantes, BP 52231 Chemin de la Censive du Tertre, 44322 Nantes Cedex 3, France; CNAV and INED, Paris, France.)
    Abstract: In this paper, we investigate whether educational inequalities stem rather from differences between families or within families. In a poor economy, schooling is costly for parents and education is likely to be unequally distributed among siblings. Drawing on discrete ordered choice models, we present a simple method to estimate the between and within components of both the explained and unexplained variances of education. For our empirical analysis, we use the LSMS survey conducted in 2002 in Albania. We explain about 40% of the total variance and find that inequalities in education are mainly due to differences between families. Differences within family are lower and far less easily explained.
    Keywords: Education, intra-household inequality, random effects ordered Probit models, siblings
    JEL: D13 I2
    Date: 2007
  3. By: Yavuz, Elif; Ragatz, Andy; Fengler, Wolfgang; Arze del Granado, F. Javier
    Abstract: What are the current trends and main characteristics of public education spending in Indonesia? Is education spending insufficient? Are expenditures in education 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 composition of education spending and its breakdown by programs. It presents estimations of the expected (average) level of education spending for a country with its economic and social characteristics. This analysis sheds light on the efficiency and equity of education spending by presenting social rates of return by level of education, by assessing the adequacy of current teacher earnings relative to other paid workers and the distribution of teachers across urban, rural, and remote regions, and by identifying the main determinants of education enrollment. It concludes that the current challenges in Indonesia are no longer defined by the need of additional spending, but rather the need 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 for 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 at addressing demand-side factors.
    Keywords: Education For All,Primary Education,Tertiary Educat ion,Teaching and Learning,
    Date: 2007–08–01
  4. By: Giorgio Brunello (Università di Padova); Lorenzo Rocco (Università di Padova)
    Abstract: When school quality increases with the educational standard set by schools, education before college needs not be a hierarchy with private schools offering better quality than public schools. An alternative configuration, with public schools offering a higher educational standard than private schools, is also possible, in spite of the fact that tuition levied by private schools is strictly positive. In our model, private schools can offer a lower educational standard at a positive price because they attract students with a relatively high cost of effort, who would find the high standards of public schools excessively demanding. With the key parameters calibrated for the US and Italy, our model predicts that majority voting in the US supports a system with high quality private schools and low quality public schools, as assumed by Epple and Romano, 1998. An equilibrium with low quality private schools is supported instead in Italy.
    Keywords: private schools, public schools, majority voting
    JEL: J24 H42
    Date: 2007–09
  5. By: Abbas, Qaisar; Foreman-Peck, James (Cardiff Business School)
    Abstract: This paper estimates and interprets returns to education for three sub-sectors of labour market by gender in Pakistan, using the most recent data set of Pakistan Social and Living Standards Measurement (PSLM) Survey 2004-05. The results show two distinctive features of Pakistani education, the high apparent returns to female education outside agriculture, and the remarkable increase of returns with successive levels of education, are to be explained primarily by two departures from the basic Mincer model; generally poor quality primary schooling and family unwillingness to invest in female education because of lack of earning opportunities. There is some signaling in Pakistani education investment but mainly the education is productivity-enhancing investment in human capital, according to a comparison of self-employed and paid employed earnings equations. Returns to public spending of education are extremely high, suggesting very considerable state underinvestment. The policy challenge is in the low wages and high education in the female paid employment sector, and the low participation rate.
    Keywords: Rates of return; gender; occupation; Pakistan
    JEL: J16 J18 J24
    Date: 2007–08
  6. By: Ketteni Elena (University of Cyprus); Mamuneas Theofanis (University of Cyprus); Stengos Thanasis (University of Guelph, Canada and Rimini Centre for Economic Analysis, Italy)
    Abstract: In this paper we compare the impact of hardware, software and com munication equipments, widely referred to as information and communication technologies (ICT) on economic growth among the advanced industrialized countries. We use nonparametric techniques that allow us to directly estimate the elasticity of ICT and human capital for each country and time period. We also examine whether the nonlinear relationship between human capital and growth, found in the literature, still persists in the presence of ICT e¤ects. The data covers the period from 1980-2004, for a range of OECD countries and the results indicate that there exist a nonlinear relationship between ICT and productivity along with a nonlinear relationship between human capital and productivity. Additionally, we observe that in high levels of ICT capital the output elasticities of human capital are larger and the more educated workers in a country the higher are the output elasticities of ICT.
    Date: 2007–07
  7. By: Tali Regev
    Abstract: This paper explores how the steady trends in increasing tuition costs, college enrollment, and the college wage gap might be related to the quality of college graduates. The model shows that the signaling role of education might be an important yet largely neglected ingredient in these recent changes. I develop a special signaling model in which workers of heterogeneous abilities face the same costs, yet a larger proportion of able individuals self-select to attend college since they are more likely to get higher returns. With imperfect information, the skill premium is an outcome which depends on the equilibrium quality of college attendees and nonattendees. Incorporating a production function of college education, I discuss the properties of the college market equilibrium. A skill-biased technical change directly decreases self-selection into college, but the general equilibrium effect may overturn the direct decline, since increased enrollment and rising tuition costs increase self-selection. Higher initial human capital has an external effect on subsequent investment in school: All agents increase their education, and the higher equilibrium tuition costs increase self-selection and the college premium.
    Keywords: College costs ; Education, Higher - Economic aspects
    Date: 2007
  8. By: Sean Archer (University of Cape Town)
    Abstract: Abstract: This paper aims to introduce selected issues from the international literature on skills training into the South African policy forum. Reform of national strategies in skills production has characterised a number of industrial as well as certain developing economies in recent decades. Their experience is potentially valuable locally. The main lessons are that skills training resembles education in being partly a public good. The acquisition of skills parallels the acquisition of knowledge. Training opportunities do have to be rationed by some mechanism, either through the market or by rules internal to an organisation engaged in training, but the content of the competency learned is a form of knowledge. More competency with economic value that is acquired by one person does not mean less of it is available for acquisition by another. Nor, secondly, can non-payers be wholly excluded from the benefits of training financed by others. For example, there are separate gains for fellow workers, for employers poaching trained workers, and for investors in new technology. So certain economic decision-takers can free-ride on such investments in human capital. As classic examples of market failure they make clear that simple allocation through a market is not at all adequate for a national system of skills training. The second lesson is that problems of information, incentives and market power preclude the emergence of a training equilibrium in which individual workers and employers pursue their interests successfully and therefore efficiently. In practice most training takes place on the job, where it is difficult for an outside agency like the state to influence investment decisions directly. Sensible roles for the state are to supply needed information, to put in place positive and negative incentives where needed, to provide accreditation that is credible in the market, to set up a framework of regulation that fosters informational transparency and constrains skills poaching, and to invest in high quality prior education for trainees flowing into occupational markets. An additional state function is to provide workable policy devices like ‘temporary migration programmes’ that enable active skilled labour recruitment from source countries. International precedents exist that show the way in a number of these expedients.
    Keywords: skills training, on the job training, South African policy
    JEL: A1
    Date: 2007–07
  9. By: Marc Gurgand; Eric Maurin
    Abstract: We evaluate the wage impact of the strong and rapid increase in schooling levels experienced by the cohorts born after WWII in France. In order to identify the causal effect of education, we exploit the fact that the small group of people graduating from elite education (Grandes Ecoles) remained stable, while the rest of the system experienced tremendous transformation. This provides a well defined control group. Using large scale labor force surveys for the 1990's, we find that the cohorts that received more education have a lower wage gap, relative to Grandes Ecoles. We show that such a large scale experiment measures a social return to schooling even in the presence of signaling, whereas strategies based on quasi-experiments are not necessarily robust to signaling. Our instrumental variable estimation finds returns to schooling very similar to the rest of the literature, which is a strong case against the signaling hypothesis.
    Date: 2007
  10. By: Renee Grawitzky
    Abstract: Abstract: Sector Education and Training Authorities (Setas), established in terms of the Skills Development Act, 97 of 1998, were launched amid much fanfare and expectation of delivery towards achieving a skills revolution in the country. Upon their immediate establishment in March 2000, these perceived bureaucracies – which controlled the flow of billions – came under attack and became the subject of constant criticism. Over the years, this criticism has not abated and perceptions of Seta non-delivery has been exacerbated by recent reports that a resolution to the ‘skills crisis’ is critical for the success of government’s Accelerated and Shared Growth Strategy for South Africa (Asgisa). The perception of a skills crisis has raised concerns as to whether Setas are responsive enough to the needs of employers (private and public) and the country as a whole. In view of these underlying sentiments, the University of Cape Town’s Development Policy Research Unit (DPRU) commissioned a study to evaluate the role of Setas in contributing towards addressing the country’s skills needs. This study will seek to evaluate Seta performance since their inception by exploring: • Seta functioning and distill, from a range of perceptions (and legislation), their core deliverables and responsibilities; • Whether there are underlying factors – systemic or otherwise – which are impacting on the way in which Setas are supposed to operate; and • Based on the findings of three case studies, recommend interventions to improve Seta performance.
    Keywords: Setas (Sector Education and Training Authorities), Skills development
    JEL: A1
    Date: 2007–07
  11. By: Michael Gorski (University of Paderborn); Tim Krieger (University of Paderborn); Thomas Lange (Ifo institute for economic research & University of Konstanz)
    Abstract: In a two-period model with agent heterogeneity we analyze a pension reform toward a stronger link between contributions and benefits (as recently observed in several countries) in a pension system with a Bismarckian and a Beveridgian component. We show that such a policy change reduces the educational level in an economy. The life expectancy differential between skilled and unskilled individuals drives this result. Furthermore, we investigate the consequences on the intragenerational redistribution characteristics of the pension system – in the sense of the number of net-recipients relative to net-payers – as well as welfare effects.
    Keywords: social security, education, life expectancy, pension reform, redistribution
    JEL: H55 I21 D39
    Date: 2007–03
  12. By: Rajeev Dehejia; Thomas DeLeire; Erzo F.P. Luttmer; Joshua Mitchell
    Abstract: This paper examines whether participation in religious or other social organizations can help offset the negative effects of growing up in a disadvantaged environment. Using the National Survey of Families and Households, we collect measures of disadvantage as well as parental involvement with religious and other social organizations when the youth were ages 3 to 19 and we observe their outcomes 13 to 15 years later. We consider a range of definitions of disadvantage in childhood (family income and poverty measures, family characteristics including parental education, and child characteristics including parental assessments of the child) and a range of outcome measures in adulthood (including education, income, and measures of health and psychological wellbeing). Overall, we find strong evidence that youth with religiously active parents are less affected later in life by childhood disadvantage than youth whose parents did not frequently attend religious services. These buffering effects of religious organizations are most pronounced when outcomes are measured by high school graduation or non-smoking and when disadvantage is measured by family resources or maternal education, but we also find buffering effects for a number of other outcome-disadvantage pairs. We generally find much weaker buffering effects for other social organizations.
    JEL: D10 I30 J62 Z12
    Date: 2007–09
  13. By: Muehler, Grit; Beckmann, Michael; Schauenberg, Bernd
    Abstract: The present paper examines the wage effects of continuous training programs using individual-level data from the German Socio Economic Panel (GSOEP). In order to account for selectivity in training participation we estimate average treatment effects (ATE and ATT) of general and firm-specific continuous training programs using several state-of-the-art propensity score matching (PSM) estimators. Additionally, we also apply a combined matching difference-indifferences (MDiD) estimator to account for unobserved individual characteristics (e.g. motivation, ability). While the estimated ATE and ATT for general training are significant ranging between about 4 and 7.5 %, the corresponding wage effects of firm-specific training are mostly insignificant. Using the more appropriate MDiD estimator, however, we find a more precise and highly significant wage effect of about 5 to 6 %, though only for general training and not for firm-specific training. These results are consistent with standard human capital theory insofar as general training is associated with larger wage increases than firm-specific training. Furthermore, we conclude that firms may intend to use specific training to adjust to new job requirements, while career-relevant changes may be conditioned to general training.
    Keywords: Continuous training, wage effect, average treatment effect, selectivity bias, propensity score matching estimators
    JEL: C21 J24 J31 M53
    Date: 2007
  14. By: Raquel Fernandez
    Abstract: Married women's labor force participation has increased dramatically over the last century. Why this has occurred has been the subject of much debate. This paper investigates the role of culture as learning in this change. To do so, it develops a dynamic model of culture in which individuals hold heterogeneous beliefs regarding the relative long-run payoffs for women who work in the market versus the home. These beliefs evolve rationally via an intergenerational learning process. Women are assumed to learn about the long-term payoffs of working by observing (noisy) private and public signals. They then make a work decision. This process generically generates an S-shaped figure for female labor force participation, which is what is found in the data. The S shape results from the dynamics of learning. I calibrate the model to several key statistics and show that it does a good job in replicating the quantitative evolution of female LFP in the US over the last 120 years. The model highlights a new dynamic role for changes in wages via their effect on intergenerational learning. The calibration shows that this role was quantitatively important in several decades.
    JEL: E2 J21 Z1
    Date: 2007–09
  15. By: Jacques Silber; Olivier Giovannoni; Amedeo Spadaro
    Abstract: This paper begins by proposing two cardinal measures of inequality in life chances as well as an ordinal representation of such inequality based on the use of so-called social immobility curves. Using as its database a matrix in which the lines correspond to the social category of parents (e.g., their occupation or educational level) and the columns to the income distribution of their children, it then highlights the importance of the marginal distributions when comparing social immobility within two populations, and shows how it is possible to neutralize differences in these margins. The idea is to adapt a method used in the field of occupational segregation measurement that allows one to make a distinction between differences in gross and net social immobility, assuming that the marginal distributions of the two populations are identical. Borrowing ideas from recent literature on the equality of opportunity, the paper then defines the concept of an inequality in circumstances curve and relates it to that of a social immobility curve. Two empirical datasets are used to determine the usefulness of the concepts presented. The first dataset comes from a survey conducted in France in 1998 and allows one to measure the degree of social immobility and of inequality in circumstances on the basis of the occupation of fathers or mothers and the income class to which sons or daughters belong. The second dataset, drawn from a social survey conducted in Israel in 2003, is the basis for a study of social immobility and inequality in circumstances, emphasizing the transition from the educational level of the fathers to the income class of the children. Both illustrations confirm the usefulness of the analytical tools described in this paper.
    Date: 2007–09
  16. By: Henri Sterdyniak (Observatoire Français des Conjonctures Économiques)
    Date: 2007

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