nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒12‒08
twelve papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Higher education and equality of opportunity in Italy By Laura Serlenga; Vito Peragine
  2. Accelerated Development of Organizational Talent By Konstantin Korotov
  3. Tenure and Output By Kathryn Shaw; Edward P. Lazear
  4. Do innovation and human capital explain the productivity gap between small and large firms? By Laia Castany; Enrique Lopez-Bazo; Rosina Moreno
  5. Personnel Economics: The Economist's View of Human Resources By Edward P. Lazear; Kathryn L. Shaw
  6. Analysis of International Migration and its Impacts on Developing Countries By Paola Barrientos
  7. Regional returns to physical capital: are they conditioned by educational attainment? By Enrique Lopez-Bazo; Rosina Moreno
  9. Why do women’s wages increase so slowly throughout their career? A dynamic model of statistical discrimination By Nathalie Havet; Catherine Sofer
  10. Factors That Affect Teaching Scores in Economics Instruction: Analysis of Student Evaluation of Teaching (SET) Data By Mohammad Alauddin; Clem Tisdell
  11. The Effects of Remedial Mathematics on the Learning of Economics: A Natural Experiment By Johan N.M. Lagerlöf; Andrew J. Seltzer
  12. Do Entrepreneurial attributes change during the Life Courses of Enterprises and Entrepreneurs? By Nandram, Sharda S.; Born, Maryse Ph.; Samsom, Karel J.

  1. By: Laura Serlenga (University of Bari); Vito Peragine (University of Bari)
    Abstract: This paper proposes a definition of equality of educational opportunities. Then, it develops a comprehensive model that allows to test for the existence of equality of opportunity in a given distribution and to rank distributions according to equality of opportunity. Finally, it provides an empirical analysis of equality of opportunity for higher education in Italy.
    Keywords: Equality of Opportunity, Higher Education, Stochastic Dominance
    JEL: D63 I2 C14
    Date: 2007
  2. By: Konstantin Korotov (ESMT European School of Management and Technology)
    Abstract: This working paper explores the challenges of accelerated development of organizational talent. The meaning of the word "accelerated" is that such development takes place at a pace that is significantly higher than that of "traditional" development that allows an individual to learn the intricacies of the current job, observe incumbents in a higher level position (usually, one level up), practice elements of the boss' job when being delegated tasks, undergoing formal training, or benefiting from the knowledge accumulated by others and codified in the knowledge management systems. Accelerated development means, contrary to the usual, more traditional developmental path, bypassing traditionally expected career steps, stretched over a longer period of time learning opportunities, and/or age-related developmental progression. Accelerated development is a necessity for organizati of qualified individuals in the internal or external labor markets, and significant pressures from other organizations that are ready to "poach" talented executives and employees and offer them even higher levels of responsibility and remuneration. Organizations also respond with accelerated development initiatives to the individuals engaged in career entrepreneurship, i.e., those who make alternative career investments in order to enjoy quicker returns in terms of career growth and progression. This paper discusses the challenges of accelerated development programs, such as not only learning the competencies required in the new position, but also developing a new identity. The paper discusses the process of going through an accelerated development program and identifies its important elements: preentry experience, initial surprise of getting into the accelerated program's environment and learning to use it, engaging in identity exploration through examining past and present identities, staging identity experiments, and, finally, stepping out of the program into the real world.
    Keywords: organizational behavior, human resource management, executive education, identity, accelerated development
    Date: 2007–09–27
  3. By: Kathryn Shaw; Edward P. Lazear
    Abstract: A key tenet of the theory of human capital is that investment in skills results in higher productivity. The previous literature has estimated the degree of investment in human capital for individuals by looking at individual wage growth as a proxy for productivity growth. In this paper, we have both wage and personal productivity data, and thus are able to measure of the increase in workers' output with tenure. The data is from an autoglass company. Most of production occurs at the individual level so measures of output are clear. We find a very steep learning curve in the year on the job: output is 53 percent higher after one year than it is initially when hired. These output gains with tenure are not reflected in equal percentage pay gains: pay profiles are much flatter than output profiles in the first year and a half on the job. For these data, using wage profiles significantly underestimates the amount of investment compared to the gains evident in output-tenure profiles. The pattern of productivity rising more rapidly than pay reverses after two years of tenure. Worker selection is also important. Workers who stay longer have higher output levels and faster early learning.
    JEL: J01 J24 J31 J33
    Date: 2007–11
  4. By: Laia Castany (Faculty of Economics, University of Barcelona); Enrique Lopez-Bazo (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona)
    Abstract: Empirical evidence is compelling that large firms are more productive than small firms. The hypothesis in this paper is that the productivity differences between small and large firms are associated with two of the main determinants of a firm’s performance: the human and technological capital that firms incorporate. We suggest that the contribution of these factors in explaining the size of the productivity gap might not only be due to the fact that large firms make a more extensive use of them, but also because large firms obtain higher returns from their investment in human and technological capital. The evidence we obtain for a comprehensive sample of Spanish manufacturing firms (1990-2002) supports this hypothesis, which has important implications for the effectiveness of policies designed to improve productivity in SMEs by stimulating innovation and the use of more skilled workers.
    Keywords: total factor productivity; innovation; skilled labour; firm size.
    JEL: D24 J24 L25
    Date: 2007–11
  5. By: Edward P. Lazear; Kathryn L. Shaw
    Abstract: Personnel economics drills deeply into the firm to study human resource management practices like compensation, hiring practices, training, and teamwork. Many questions are asked. Why should pay vary across workers within firms--and how "compressed" should pay be within firms? Should firms pay workers for their performance on the job or for their skills or hours of work? How are pay and promotions structured across jobs to induce optimal effort from employees? Why do firms use teams and how are teams used most effectively? How should all these human resource management practices, from incentive pay to teamwork, be combined within firms? Personnel economics offers new tools and new answers to these questions. In this paper, we display the tools and principles of personnel economics through a series of models aimed at addressing the questions posed above. We focus on the building blocks that form the foundation of personnel economics: the assumptions that both the worker and the firm are rational maximizing agents; that labor markets and product markets must reach some price-quantity equilibrium; that markets are efficient or that market failures have introduced inefficiencies; and that the use of econometrics and experimental techniques has advanced our ability to identify underlying causal relationships.
    JEL: J01 J24 J3 J31 J32 J33
    Date: 2007–11
  6. By: Paola Barrientos (Department of Economics, University of Aarhus)
    Abstract: This paper provides a review of the literature on the reasons and consequences of international migration. The principal determinants of migration are analyzed and it is seen that educated people from developing countries are more likely to migrate for several reasons (i.e. network determinants, costs of moving, pull factors and push factors). Looking into the empirical data, the global trend is that emigration of educated people (usually called “brain drain”) has increased a lot. This trend implies that industrialized countries are importing highly skilled people from developing countries and this will certainly have important consequences for developing countries in the long run. Some researchers argue that developing countries will loose, since the most qualified people leave and stop contributing to their country. Others say that the global trend can be beneficial because positive spillovers will be created; in the sense that developing countries will experience higher investments in human capital (“brain gain”). Empirical findings show that these spillovers depend on the probability to migrate and the stock of human capital that a country has. Finally another group of researchers argues that this process is inevitable, and barriers to migration should be abolished in order to reap the benefits for both sending and receiving countries as well as the migrants themselves.
    Keywords: Migration, Brain Drain, Brain Gain
    JEL: F22 O15
    Date: 2007–11
  7. By: Enrique Lopez-Bazo (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona)
    Abstract: This paper provides novel empirical evidence of the indirect effect of educational attainment on regional economic growth, through its influence on the profitability of investment in physical capital. We test the hypothesis that the regional heterogeneity of the return to physical capital can be directly related to the existing heterogeneity in the educational attainment of workers. The results for the Spanish case support our hypothesis that the higher the educational attainment of workers the greater the returns on investment in physical capital. In fact, this effect seems to be sufficiently strong to have counterbalanced the traditional mechanism of decreasing returns to capital accumulation.
    Keywords: returns to capital, human capital, productivity, cost system
    JEL: J24 O11 O47 R11
    Date: 2007–12
  8. By: Popovic, Milenko
    Abstract: One of the most interesting facts about the growth of developed nations, especially of the US growth, in the last three decades is significant growth of the ratio of the wage of skilled labor to that of unskilled labor. At the same time, existing evidence seems to suggest that the ratio of the rate of return on investment in skilled labor to that of unskilled labor has stayed pretty stable. This contradicting trend in movement of two ratios is formally easy to explain. Being aware of the fact that all possible measures of the rate of return in education confront, in one way or another, differences in wages of different educational levels with the cost of reaching the concerned level of education, we can with certainty conclude that, in order to keep the rate of return ratio unchanged, the increase of wage ratio should be accompanied with adequate increase in the ratio of the cost of reaching a skilled level of education to the cost of reaching an unskilled level. This is something that follows from identity and as such cannot be questioned. The real question here refers to a possible source of relative increase in the cost of reaching skilled level of education. Possibilities are here enormous and every developed country presents a different story. The purpose of this article is to shed a light on one of the sources of education cost growth which is common to all developed countries and which can explain the greatest part of education cost ratio increase in all developed countries. In what follows we will show that the increase in the cost of education ratio is mostly due, first, to the fact that technological progress in industry of education is negligible, second, to the fact that “products” of industry of education are nontradeables, and third, to the increase of wage ratio itself.
    Keywords: Inequality; Growth; Capital of Education; Costs of Education
    JEL: O47 O15 J01
    Date: 2007–06–25
  9. By: Nathalie Havet (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Catherine Sofer (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I)
    Abstract: The aim of this paper is to explain the growing wage differentials between men and women<br />during their working careers. We provide a dynamic model of statistical discrimination, which<br />integrates specific human capital decisions: on-the-job training investment and wages are<br />endogenously determined. We reveal a small wage differential at the beginning of women’s<br />career, followed by a larger wage differential; this is partly due to a lower level of human capital<br />investment by women and partly because firms smooth training costs between different periods.
    Keywords: Statistical discrimination, careers, male/female differentials, gender wage gap, specific human capital.
    Date: 2007–10
  10. By: Mohammad Alauddin; Clem Tisdell (School of Economics, The University of Queensland)
    Abstract: This paper explores the factors that affect students’ evaluations of economics instructions using a sample of over 2400 completed questionnaires at a large Australian university. Ordered probit analysis is used to determine the changes in the predicted probability of teaching evaluation (TEVAL) scores with variations, amongst other things, in students’ perceptions of the quality of presentation; explanation and organization of lecture material; and helping students improve their learning skills. Analyses of the comparative importance of the relationships both for undergraduate and postgraduate courses reveal significant differences across levels of the undergraduate program but little differences in students’ responses in higher level undergraduate and postgraduate instructions. One disturbing finding is that a key variable, namely emphasis on thinking rather than memorizing (THINKMEM) has little or no substantive impact on TEVAL. Thus the implication is that high TEVALs can be achieved at the cost of some critically important factors in teaching and learning. Consequently, those using just TEVAL score to evaluate teaching need to look closely at other factors of critical importance.
    Date: 2007
  11. By: Johan N.M. Lagerlöf (Department of Economics, Royal Holloway, University of London); Andrew J. Seltzer (Department of Economics, Royal Holloway, University of London)
    Abstract: This paper examines the effects of remedial mathematics on performance in university-level economics courses using a natural experiment. We study exam results prior and subsequent to the implementation of a remedial mathematics course that was compulsory for a sub-set of students and unavailable for the others, controlling for background variables. We find that, consistent with previous studies, the level of and performance in secondary-school mathematics has strong predictive power on students’ performance at university-level economics. However, the evidence for a positive effect of remedial mathematics on student performance is relatively weak and is limited to a few sub-groups of students.
    Keywords: remedial mathematics, teaching of economics, difference-in-differences, heterogeneous treatment effects, quantile regressions.
    JEL: A22 I20
    Date: 2007–08
  12. By: Nandram, Sharda S.; Born, Maryse Ph.; Samsom, Karel J. (Nyenrode Business Universiteit)
    Abstract: This paper examines the relationship between entrepreneurial attributes and life stages of entrepreneurs and enterprises in a sample of 276 entrepreneurs. Findings revealed that most attributes remained constant across the life stages of the enterprises. Yet, as was expected, flexibility and awareness of opportunities became less characteristic as the enterprise moved from the start-up stage through its entrepreneurial and maturity stage. The attributes achievement orientation, assertiveness, awareness of opportunity and integrity became less characteristic across the life stages of the entrepreneur. The results are in contrast with the findings of the maturity model of personality development (Roberts, Robin 2004) but confirm organizational and vocational choice models (Schneider, Goldstein, and Smith 1995). A self-selection principle is probably at work: individuals who score very high on entrepreneurial attributes are attracted to this vocation but over their lifetime the scores on these attributes converge to more average levels
    Keywords: personality, behavioral attributes, entrepreneurs, life courses, life span
    Date: 2007

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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