nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒09‒16
ten papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. The Social Context of the Labor Supply By Stefano Bartolini; Ennio Bilancini
  2. Why Parents Worry: Initiation into Cannabis use by Youth and their Educational Attainment By Ours, J.C. van; Williams, J.
  3. What is the Value of Entrepreneurship? A Review of Recent Research By C. Mirjam van Praag; Peter H. Versloot
  4. Human Knowledge Resources and Interorganizational Systems By Ibrahim, M.K.M.; Ribbers, P.M.A.; Bettonvil, B.W.M.
  5. Earnings functions when wages and prices vary by location By Dan Black; Natalia Kolesnikova; Lowell J. Taylor
  6. Small Family, Smart Family? Family Size and the IQ Scores of Young Men By Sandra E. Black; Paul J. Devereux; Kjell G. Salvanes
  7. Subjective Beliefs and Schooling Decisions By Christian Belzil
  8. On-the-job learning and earnings in Benin, Morocco and Senegal By Christophe Nordman; François-Charles Wolff
  9. The Knowledge Filter, Entrepreneurship, and Economic Growth By Bo Carlsson; Zoltan J. Acs; David B. Audretsch; Pontus Braunerhjelm
  10. Can increasing private school participation and monetary loss in a voucher program affect public school performance? Evidence from Milwaukee By Rajashri Chakrabarti

  1. By: Stefano Bartolini; Ennio Bilancini
    Abstract: In this paper we empirically investigate the relationship between social capital and the supply of labor. We identify social capital with non-market relationships. Data are obtained from the US General Social Survey for the period 1976-2004. We find evidence that social capital affects the supply of labor. In particular non-instrumental relations reduce the supply of labor, whereas instrumental relations increase it. Moreover, there are substantial differences between men and women: social capital has a greater impact on the labor supply of women. Our findings suggest that Putnam’s thesis that the decline of US social capital is largely due to the increase in participation of women to the labor market may be partly reversed: the decline of US intrinsic social capital has fostered women’s labor market participation.
    Keywords: intrinsic motivations, labor supply, relational goods, social capital
    JEL: J2 I3 Z1
    Date: 2007–08
  2. By: Ours, J.C. van; Williams, J. (Tilburg University, Center for Economic Research)
    Abstract: In this paper we use individual level data from the Australian National Drug Strategy Household Survey to study the relationship between initiation into cannabis use and educational attainment. Using instrumental variable estimation and bivariate duration analysis we find that those initiating into cannabis use early in life are much more likely to dropout of school compared to those who start later on. Moreover, we find that the reduction in years of schooling depends on the age at which initiation occurs, and that it is larger for females than males.
    Keywords: cannabis use; age of initiation; educational attainment
    JEL: C41 D12 I19
    Date: 2007
  3. By: C. Mirjam van Praag (University of Amsterdam; Tinbergen Institute; Max Planck Institute of Economics; IZA Institute for the Study of Labour); Peter H. Versloot (University of Amsterdam; Tinbergen Institute)
    Abstract: This paper examines to what extent recent empirical evidence can collectively and systematically substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to non-entrepreneurs? We study the relative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth, relative to the contributions of the entrepreneurs' counterparts, i.e. the 'control group'? A fourth type of contribution studied is the role of entrepreneurship in increasing individuals' utility levels. Based on 57 recent studies of high quality that contain 87 relevant separate analyses, we conclude that entrepreneurs have a very important - but specific - function in the economy. They engender relatively much employment creation, productivity growth and produce and commercialize high quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important spillovers that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be missed either as they account for a relatively high value of GDP, a less volatile and more secure labor market, higher paid jobs and a greater number of innovations and they have a more active role in the adoption of innovations.
    Keywords: entrepreneur, entrepreneurship, self-employment, productivity, economic development, growth, employment, innovation, patents, R+D, utility, remuneration, income.
    JEL: D24 D31 E23 E24 J21 J28 J31 L26 M13
    Date: 2007–09–12
  4. By: Ibrahim, M.K.M.; Ribbers, P.M.A.; Bettonvil, B.W.M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This paper analyses how human knowledge resources affect capabilities and subsequently attainment of operational and strategic benefits. We test a conceptual model using data from two qualitative case studies and a quantitative field study. The findings indicate that human knowledge positively influences IOS capabilities related to cross-organizational business processes and transfer of knowledge. The data show that strategic benefits are the consequence of knowledge transfer, when the transfer supports business processes resulting in operational benefits.
    Keywords: Interorganizational systems;resource-based view;IOS capabilities;Strategic benefits;Human Knowledge;
    Date: 2007–07–16
  5. By: Dan Black; Natalia Kolesnikova; Lowell J. Taylor
    Abstract: In this paper we study whether location-specific price variation likely affects statistical inference and theoretical interpretation in the empirical implementation of human capital earnings functions. We demonstrate, in a model of local labor markets, that the ?return to schooling" is a constant across locations if and only if preferences are homothetic ? a special case that seems unlikely to generally pertain. Examination of U.S. Census data (for 1980, 1990, and 2000) provides persuasive evidence that the return to a college education, relative to a high school education, does indeed vary widely across cities, e.g., in 1990 the return in Houston is 0.54 while in Seattle it is only 0.33. We provide theoretical reasons to suspect that the returns to education are relatively lower in expensive high-amenity locations, and present evidence consistent with this prediction. Finally, we raise concerns about standard empirical exercises in labor economics which treat the returns to education as a single parameter.
    Keywords: Wages ; Labor market ; Education
    Date: 2007
  6. By: Sandra E. Black (University of California, Los Angeles, NHH, NBER and IZA); Paul J. Devereux (University College Dublin, CEPR and IZA); Kjell G. Salvanes (Norwegian School of Economics, Statistics Norway, CEP and IZA)
    Abstract: How do families influence the ability of children? Cognitive skills have been shown to be a strong predictor of educational attainment and future labor market success; as a result, understanding the determinants of cognitive skills can lead to a better understanding of children’s long run outcomes. This paper uses a large dataset on the male population of Norway and focuses on one family characteristic: the effect of family size on IQ. Because of the endogeneity of family size, we instrument for family size using twin births and sex composition. IV estimates using sex composition as an instrument show no negative effect of family size; however, IV estimates using twins imply that family size has a negative effect on IQ. Our results suggest that effect of family size depends on the type of family size intervention. We conclude that there are no important negative effects of expected increases in family size on IQ but that unexpected shocks to family size resulting from twin births have negative effects on the IQ of existing children.
    Keywords: family size, IQ
    JEL: I2 J1
    Date: 2007–08
  7. By: Christian Belzil (GATE CNRS, Institute for the Study of Labor (IZA))
    Abstract: This paper considers the estimation of sequential schooling decisions made by agents who are endowed with subjective beliefs about their own ability. I use unique Italian panel data which provide information on i) the curvature of the per-period utility function, ii) schooling decisions, iii) post-schooling earnings, in order to estimate the future component of the differences in intertemporal utilities of school and work independently from the present component, (as in Geweke and Keane, 1995, 2001), and evaluate the importance of “present bias”. Under certain conditions, which include imposing equality between the modal belief and true ability, I recover individual specific subjective probability distributions. I estimate both the degree of confidence (a measure of spread) and the incidence of over (and under) estimation. I find that the future component of intertemporal utilities dominates schooling decisions. I find a strong incidence of under-estimation among the more able and a much smaller incidence of over-estimation among the low ability group. At the medium ability spectrum, there is evidence of some over-estimation. The degree of confidence is high and imply that agents have a substantial amount of inside information (36% of the population act on a degenerate subjective distribution). Overall, the variance of the objective ability heterogeneity distribution is 4 times as large the variance of the distribution characterizing subjective beliefs.
    Keywords: dynamic programming, education, over-confidence, present bias, rational expectation, subjective distributions
    JEL: J24
    Date: 2007–07
  8. By: Christophe Nordman (DIAL, IRD, Paris); François-Charles Wolff (LEN, Université de Nantes, CNAV, INED)
    Abstract: (english) In this paper, we consider a model of on-the-job learning where workers learn informally by watching and imitating colleagues. We estimate the rate of knowledge diffusion inside the firm using three matched worker-firm data sets from Benin, Morocco and Senegal. We rely on non-linear least squares to estimate the structural parameters of the informal learning model and account for unobserved firm heterogeneity using firm factors derived from a principal component analysis. We find that the rate of knowledge diffusion is around 7 percent in Morocco and Senegal and much higher in Benin, but part of the learning-bywatching returns stems from firm heterogeneity. Informal training significantly affects the shape of returns to tenure in African countries. Finally, we estimate an extended model with both learning-by-watching and learning-by-doing and find significant benefits from imitating colleagues in Morocco.
    Keywords: Earnings functions, informal training, learning-by-watching, learning-by-doing,returns to tenure, African countries
    JEL: J24 J31 O12
    Date: 2007–07
  9. By: Bo Carlsson (Case Western Reserve University); Zoltan J. Acs (University of Baltimore); David B. Audretsch (Max-Planck Institute of Economics, Jena, Germany); Pontus Braunerhjelm (Royal Institute of Technology)
    Abstract: This paper explores the relationship between knowledge creation, entrepreneurship, and economic growth in the United States over the last 150 years. According to the "new growth theory", investments in knowledge and human capital generate economic growth via spillovers of knowledge. But the theory does not explain how or why spillovers occur, or why large investments in R+D do not always result in economic growth. What is missing is "the knowledge filter" - the distinction between general knowledge and economically useful knowledge. Also missing is a mechanism (such as entrepreneurship) converting economically relevant knowledge into economic activity. This paper shows that the unprecedented increase in R+D spending in the United States during and after World War II was converted into economic activity via incumbent firms in the early postwar period and increasingly via new ventures in the last few decades.
    Keywords: knowledge, economic growth, entrepreneurship, spillovers, history
    JEL: O14 O17 O30 N90
    Date: 2007–09–12
  10. By: Rajashri Chakrabarti
    Abstract: The Milwaukee voucher program, as implemented in 1990, allowed only nonsectarian private schools to participate in the program. However, following a Wisconsin Supreme Court ruling, the program was expanded to include religious private schools in 1998. This second phase of the voucher program led to more than a three-fold increase in the number of private schools and almost a four-fold increase in the number of choice students. Moreover, because of some changes in funding provisions, the revenue loss per student from vouchers increased in the second phase of the program. This paper analyzes, both theoretically and empirically, the effects of these changes on public school performance (as measured by test scores) in Milwaukee. It argues that voucher design matters and that the choice of parameters in a voucher program is crucial in determining the effects of public school incentives and performance. In the context of a theoretical model of public school and household behavior, the paper establishes that the policy changes will lead to an improvement of the public schools in the second phase of the program as compared with the first phase. Following Hoxby (2003a, 2003b) in the classification of treatment and control groups and using 1987-2002 data and a difference-in-differences estimation strategy in trends, the paper then shows that the theoretical prediction is validated empirically. This result is robust to alternative samples and specifications and survives robustness checks, including correcting for mean reversion.
    Keywords: Educational vouchers ; Education - Economic aspects ; Private schools ; Public schools ; School choice ; Households
    Date: 2007

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