nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒09‒30
nine papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Human capital formation, inequality, and competition for jobs By Daniel Mejía; Marc St-Pierre
  2. Skill Biased Financial Development: Education, Wages and Occupations in the U.S. Financial Sector By Thomas Philippon; Ariell Reshef
  3. Why Are Most University Students Women? Evidence Based on Academic Performance, Study Habits and Parental Influences By Frenette, Marc; Zeman, Klarka
  4. The Demographic Challenge of the Interconnected Education and Pension System in the Czech Republic By Sergey Slobodyan; Viatcheslav Vinogradov
  5. Why Parents Worry: Initiation into Cannabis Use by Youth and their Educational Attainment By van Ours, Jan C; Williams, Jenny
  6. A micro-decomposition analysis of the macroeconomic determinants of human development By van de Walle, Dominique; Ravallion, Martin; Lambert, Sylvie
  7. Winners and losers: A Micro-level Analysis of International Outsourcing and Wages By Geishecker, Ingo; Görg, Holger
  8. Research, Knowledge Spillovers and Innovation By Piergiuseppe Morone; Carmelo Petraglia; Giuseppina Testa
  9. Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments By Jonathan Guryan; Kory Kroft; Matt Notowidigdo

  1. By: Daniel Mejía; Marc St-Pierre
    Abstract: This paper develops a model where heterogeneous agents compete for the best available jobs. Firms, operating with different technologies, rank job candidates in the human capital dimension and hire the best available candidate due to complementarities between the worker’s human capital and technologies used in the production process. As a result, individuals care about their relative ranking in the distribution of human capital because this determines the firm they will be matched with and therefore the wage they will receive in equilibrium. The paper rationalizes a different channel through which peer effects and human capital externalities might work: competition between individuals for the best available jobs (or prizes associated with the relative position of individuals). We show that more inequality in the distribution of endowments negatively affects aggregate efficiency in human capital formation as it weakens competition for jobs between individuals. However, we find that the opposite is true for wage inequality, namely, more wage inequality encourages competition and, as a result, agents exert more effort and accumulate more human capital in equilibrium.
    Date: 2007–09–19
  2. By: Thomas Philippon; Ariell Reshef
    Abstract: Over the past 60 years, the U.S. financial sector has grown from 2.3% to 7.7% of GDP. While the growth in the share of value added has been fairly linear, it hides a dramatic change in the composition of skills and occupations. In the early 1980s, the financial sector started paying higher wages and hiring more skilled individuals than the rest of economy. These trends reflect a shift away from low-skill jobs and towards market-oriented activities within the sector. Our evidence suggests that technological and financial innovations both played a role in this transformation. We also document an increase in relative wages, controlling for education, which partly reflects an increase in unemployment risk: Finance jobs used to be safer than other jobs in the private sector, but this is not longer the case.
    JEL: G2 J21 J24 J3
    Date: 2007–09
  3. By: Frenette, Marc; Zeman, Klarka
    Abstract: In this study, we use new Canadian data containing detailed information on standardized test scores, school marks, parental and peer influences, and other socio-economic background characteristics of boys and girls to try to account for the large gender gap in university attendance. Among 19-year-old youth in 2003, 38.8% of girls had attended university, compared with only 25.7% of boys. However, young men and women were about equally likely to attend college. We find that differences in observable characteristics between boys and girls account for more than three quarters (76.8%) of the gap in university participation. In order of importance, the main factors are differences in school marks at age 15, standardized test scores in reading at age 15, study habits, parental expectations and the university earnings premium relative to high school. Altogether, the four measures of academic abilities used in the study "overall marks, performance on standardized reading tests, study habits and repeating grade" collectively account for 58.9% of the gender gap in university participation. These results suggest that understanding why girls outperform boys in the classroom may be a key to understanding the gender divide in university participation.
    Keywords: Education, training and learning, Society and community, Educational attainment, Literacy, Women and gender
    Date: 2007–09–20
  4. By: Sergey Slobodyan; Viatcheslav Vinogradov
    Abstract: In their recent paper, Boldrin and Montes (2005) analyze the “return on human capital investment” theory and show that if borrowing for education is not possible, then a combined public education and pension system that uses lump sum taxes and transfers can replicate the first-best decentralized allocation achieved in an economy without taxes where borrowing for human capital accumulation (education) is allowed. Taking into account that such borrowing is either absent or inefficient in many countries, a combined public education/public pensions scheme in such countries might prove to be welfare enhancing. Guided by this theoretical framework, we calibrate the parameters of an interconnected pension and education system for the Czech Republic under different demographic scenarios and fiscal rules. We also model the impact of an increase in the retirement age and of a hypothetical imbalance of pensions or educational transfers.
    Keywords: Public education, demographic development, pay-as-you-go pensions
    JEL: H52 H55 I22 I28 J11 J26
    Date: 2007–04
  5. By: van Ours, Jan C; Williams, Jenny
    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: age of initiation; cannabis use; educational attainment
    JEL: C41 D12 I19
    Date: 2007–09
  6. By: van de Walle, Dominique; Ravallion, Martin; Lambert, Sylvie
    Abstract: This paper shows how differences in aggregate human development outcomes over time and space can be additively decomposed into a pure economic-growth component, a component attributed to differences in the distribution of income, and components attributed to " non-income " factors and differences in the model linking outcomes to income or non-income characteristics. The income effect at the micro level is modeled non-parametrically, so as to flexibly reflect distributional changes. The paper illustrates the decomposition using data for Morocco and Vietnam, and the results offer some surprising insights into the observed aggregate gains in schooling attainments. A user friendly STATA program is available to implement the method in other settings.
    Keywords: Primary Education,Education For All,Population Policies,Rural Poverty Reduction,Inequality
    Date: 2007–09–01
  7. By: Geishecker, Ingo; Görg, Holger
    Abstract: Our paper investigates the link between international outsourcing and wages utilizing a large household panel and combining it with industry level information on industries' outsourcing activities from input-output tables. This approach avoids problems such as aggregation bias, potential endogeneity bias and poor skill definitions that commonly hamper industry-level studies. We find that outsourcing has had a marked impact on wages. Applying two alternative skill classifications we find evidence that a one percentage point increase in outsourcing reduced the wage for workers in the lowest skill categories by up to 1.5% while it increased wages for high-skilled workers by up to 2.6%. This result is robust to a number of different specifications.
    Keywords: international outsourcing; offshoring; skills; wages
    JEL: F16 J31
    Date: 2007–09
  8. By: Piergiuseppe Morone; Carmelo Petraglia; Giuseppina Testa (School of Economics, Mathematics & Statistics, Birkbeck)
    Abstract: In order to assess the relationship between internal and external innovative inputs and innovative output at firm level, a knowledge production function is estimated for a representative sample of Italian manufacturing firms over the period 1998-2003. To account for endogeneity of R&D effort in the knowledge production function, we estimate a Heckman selection model on R&D decisions. Results support the view that R&D intensity is positively linked to firm size, age and human capital endowment as well as to higher exposure to international competitive pressure. Then, the knowledge production function is estimated using a standard probit, where the probability to innovate of each firm depends upon intramural R&D effort, regional and industrial spillovers and on a vector of interaction and control variables. Our measures of external knowledge, which circulates and potentially transfers across firms belonging to the same geographical or industrial spaces, are based on predicted values for R&D effort in the region and industry respectively. Our results suggest a positive relationship between sectoral spillovers and innovation; knowledge diffusion in the regional space positively impacts on the probability to innovate of the recipient firm only if the latter has an appropriate endowment of human capital.
    Keywords: Innovation, knowledge, spillovers
    JEL: O3 L6 C25
    Date: 2007–09
  9. By: Jonathan Guryan; Kory Kroft; Matt Notowidigdo
    Abstract: This paper uses the random assignment of playing partners in professional golf tournaments to test for peer effects in the workplace. We find no evidence that the ability of playing partners affects the performance of professional golfers, contrary to recent evidence on peer effects in the workplace from laboratory experiments, grocery scanners, and soft-fruit pickers. In our preferred specification, we can rule out peer effects larger than 0.045 strokes for a one stroke increase in playing partners' ability, and the point estimates are small and actually negative. We offer several explanations for our contrasting findings: that workers seek to avoid responding to social incentives when financial incentives are strong; that there is heterogeneity in how susceptible individuals are to social effects and that those who are able to avoid them are more likely to advance to elite professional labor markets; and that workers learn with professional experience not to be affected by social forces. We view our results as complementary to the existing studies of peer effects in the workplace and as a first step towards explaining how these social effects vary across labor markets, across individuals and with changes in the form of incentives faced. In addition to the empirical results on peer effects in the workplace, we also point out that many typical peer effects regressions are biased because individuals cannot be their own peers, and suggest a simple correction.
    JEL: J01 J24 J3 J44
    Date: 2007–09

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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