nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2007‒12‒15
twelve papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. The Brain Drain, “Educated Unemployment,” Human Capital Formation, and Economic Betterment By Oded Stark; C. Simon Fan
  2. Elite Scientists and the Global Brain Drain By Ali, Showkat; Carden, Giles; Culling, Benjamin; Hunter, Rosalind; Oswald, Andrew J; Owen, Nicola; Ralsmark, Hilda; Snodgrass, Natalie
  3. Entrepreneurship, Knowledge and Economic Growth By Braunerhjelm, Pontus
  4. Interactions between Employment and Training Policies By Frank Oskamp; Dennis J. Snower
  5. Intergenerational Transmission of Educational Attainment in Germany : The Last Five Decades By Guido Heineck; Regina T. Riphahn
  6. The knowledge filter, Entrepreneurship and Economic Growth By Carlsson, Bo; Acs, Zoltan; Audretsch, David; Braunerhjelm, Pontus
  7. Entrepreneurial potential in Business and Engineering courses … why worry now? By Aurora A.C. Teixeira
  8. Necessity and Opportunity Entrepreneurs and their Duration in Self-employment: Evidence from German Micro Data By Block, Jörn H.; Sandner, Philipp G.
  9. Inter District Disparities in Meghalaya: A Human Development Approach By Nayak, Purusottam; Ray, Santanu
  10. Human Development- Conceptual and Measurement Issues By Nayak, Purusottam
  11. Migration, Learning, and Development By Zakharenko, Roman
  12. Entrepreneurship and Local Growth - a comparison of the U.S. and Sweden By Borgman, Benny; Braunerhjelm, Pontus

  1. By: Oded Stark; C. Simon Fan
    Abstract: Extending both the “harmful brain drain” literature and the “beneficial brain gain” literature, this paper analyzes both the negative and the positive impact of migration by skilled individuals in a unified framework. The paper extends the received literature on the “harmful brain drain” by showing that in the short run, international migration can result in “educated unemployment” and overeducation in developing countries, as well as a brain drain from these countries. A simulation suggests that the costs of “educated unemployment” and overeducation can amount to significant losses for the individuals concerned, who may constitute a substantial proportion of the educated individuals. Adopting a dynamic framework, it is then shown that due to the positive externality of the prevailing, economy-wide endowment of human capital on the formation of human capital, a relaxation in migration policy in both the current period and the preceding period can facilitate “take-off” of a developing country in the current period. Thus, it is suggested that while the migration of some educated individuals may reduce the social welfare of those who stay behind in the short run, it improves it in the long run.
    Date: 2007–05
  2. By: Ali, Showkat; Carden, Giles; Culling, Benjamin; Hunter, Rosalind; Oswald, Andrew J (Department of Economics, University of Warwick); Owen, Nicola; Ralsmark, Hilda; Snodgrass, Natalie
    Abstract: There are signs – one is world university league tables – that people increasingly think globally when choosing the university in which they wish to work and study. This paper is an exploration of data on the international brain drain. We study highly-cited physicists, highly-cited bio-scientists, and assistant professors of economics. First, we demonstrate that talented researchers are being systematically funnelled into a small number of countries. Among young economists in the top American universities, for example, 75% did their undergraduate degree outside the United States. Second, the extent of the elite brain drain is considerable. Among the world’s top physicists, nearly half no longer work in the country in which they were born. Third, the USA and Switzerland are per capita the largest net-importers of elite scientists. Fourth, we estimate the migration ‘funnelling coefficient’ at approximately 0.2 (meaning that 20% of top researchers tend to leave their country at each professional stage). Fifth, and against our prior expectations, the productivity of top scientists, as measured by the Hirsch h-index, is similar between the elite movers and stayers. Thus it is apparently not true that it is disproportionately the very best people who emigrate. Sixth, there is extreme clustering of ISI Highly Cited Researchers into particular fields in different universities. Seventh, we debate the questions: are the brain drain and this kind of funnelling good or bad for the world, and how should universities and governments respond?
    Date: 2007
  3. By: Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Knowledge plays a critical role in economic development, still our understanding of how knowledge is created, diffused and converted into growth, is fragmented and partial. The neoclassical growth models disregarded the entrepreneur and viewed knowledge as an exogenous factor. Contemporary current knowledge-based growth models have re-introduced the notion of the entrepreneur, however stripped of its most typical characteristics, and the diffusion of knowledge is kept exogenous. It implies that the predictions and policy conclusions derived from these models may be flawed. This paper reviews the literature that addresses the issues of knowledge creation, knowledge diffusion and growth, and the role attributed the entrepreneur in such dynamic processes. I will explore how these insights can be integrated into existing growth models and suggest a more thorough microeconomic foundations from which empirically testable hypotheses can be derived.
    Keywords: entrepreneurship; knowledge; growth; spillovers
    JEL: M13 O57
    Date: 2007–12–11
  4. By: Frank Oskamp; Dennis J. Snower
    Abstract: This paper examines the interactions between employment and training policies. Their effectiveness in stimulating income may be interdependent for various important reasons. For example, the more employment policies stimulate the employment rate, the greater the length of time over which workers use the human capital generated by training policies. Moreover, the greater the government expenditures on employment and training subsidies, the higher the taxes required to finance these expenditures and these higher taxes reduce aggregate income. On account of such effects, employment and training policies may be complementary or substitutable with respect to aggregate income. To analyze these interactions, we construct a simple, dynamic model of hiring decisions, derived from microfoundations. The model is calibrated with German data. Surprisingly, the simulation shows that, for reasonable parameter values, the complementarities are weak or absent. The analysis provides a methodology for examining policy interactions which may be useful well beyond the bounds of employment and training policies.
    Keywords: complementarities; hiring subsidies; training subsidies; vocational training; employment; unemployment
    JEL: J21 J23 J24 J64 J68
    Date: 2007–12
  5. By: Guido Heineck; Regina T. Riphahn
    Abstract: Over the last decades the German education system underwent numerous reforms in order to improve "equality of opportunity", i.e. to guarantee all pupils equal access to higher education. At the same time internationally comparative evidence yields that Germany features particularly low intergenerational mobility with respect to educational attainment. This study investigates the development in intergenerational education mobility in Germany for the birth cohorts 1929 through 1978 and tests whether the impact of parental background on child educational outcomes changed over time. In spite of massive public policy interventions and education reforms our results yield no significant reduction in the role of parental background for child outcomes over the last decades.
    Keywords: education transmission, intergenerational mobility, schooling, human capital transmission
    JEL: I21 I28 J11
    Date: 2007
  6. By: Carlsson, Bo (Case Western Reserve University); Acs, Zoltan (University of Baltimore); Audretsch, David (Max-Planck Institute); Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, 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: N90 O14 O17 O30
    Date: 2007–12–11
  7. By: Aurora A.C. Teixeira (INESC Porto; CEMPRE, Faculdade de Economia, Universidade do Porto)
    Abstract: Research on entrepreneurship potential targeting university students is emerging. However, it is in general focused on one school-one course. Few studies analyze the differences in entrepreneurial propensity between students of different subjects. In this paper we analyze the magnitude of this propensity in engineering and economics/business courses. The reason for such focus is that traditionally these courses are viewed as the ones concentrating individuals that are more likely to create new ventures. The empirical results, based on a large-scale survey of 2430 final-year students, reveal that no statistical difference exists in entrepreneurial potential of economics/business and engineering students, and that these two latter groups have lower entrepreneurial potential than students from other courses. This result proves to be quite unfortunate given the focus that previous studies have placed on these two majors, and the fact that a substantial part of entrepreneurial education is undertaken in business and engineering schools.
    Keywords: Entrepreneurship; Students; Business; Engineering
    JEL: M13
    Date: 2007–12
  8. By: Block, Jörn H.; Sandner, Philipp G.
    Abstract: Using data from the German Socio-Economic Panel Study (GSOEP), we analyze whether necessity entrepreneurs differ from opportunity entrepreneurs in terms of self-employment duration. Using univariate statistics, we find that opportunity entrepreneurs remain in self-employment longer than necessity entrepreneurs. However, after controlling for the entrepreneurs’ education in the professional area where they start their venture, this effect is no longer significant. We therefore conclude that the difference observed is not an original effect but rather is due to selection. We then go on to discuss the implications of our findings for entrepreneurship-policy making, and give suggestions to improve governmental start-up programs.
    Keywords: Self-employment; Firm survival; Necessity entrepreneurs; Opportunity entrepre-neurs; Hazard rates; GSOEP
    JEL: J23 J24 M13 C41
    Date: 2007–10–18
  9. By: Nayak, Purusottam; Ray, Santanu
    Abstract: The present paper is an attempt to highlight the magnitude and the problems of unbalanced human development in the state of Meghalaya using data collected for a Major Research Project of UGC. The study reveals widespread variations in human development across all the seven districts and disparities between rural and urban areas and between male and female groups of population within the state. There exists a significant level of disparity both in income consumption and in non-income attainments over the districts. The inequality in economic attainment happens to be very high. However, both measures of variation and inequality index suggest that few non-income indicators such as intensity of formal education and infant mortality rate have disparities over economic indicators which are indeed a cause of considerable concern. In addition, economic inequality is much higher than the overall HDI inequality. With an evidence of a huge shortfall in HDI the existing level of variation and disabilities calls for a need to redesign the public policies that directly affect the welfare of the people.
    Keywords: Disparities; Human Development; HDI
    JEL: O15 O12
    Date: 2007–12–13
  10. By: Nayak, Purusottam
    Abstract: The human development approach to development and growth as proposed by UNDP in 1990 is a widely accepted approach all over world. This paper in this connection is an attempt to describe in details about evolution of the concept of human development, its emergence as an approach to development and the methodological issues on its measurement. It provides an account of various changes in the methods of measurement brought out by UNDP, the Planning Commission, Government of India and the individual researchers at different points of time since1990.
    Keywords: Human Development; HDI
    JEL: O15
    Date: 2007–12–13
  11. By: Zakharenko, Roman
    Abstract: US-educated Indian engineers played a major role in the establishment of the “Silicon Valley of Asia” in Bangalore. The experience of India and other countries shows that returning well-educated emigrants, despite their small numbers, can make a difference. This paper builds a model of “local” knowledge spillovers, in which migration of a small number of highly skilled individuals greatly affects country-level human capital accumulation. All economic activity occurs in pairs of individuals randomly matched to each other. Each pair produces the consumption good; the skills of the two partners are complementary. At the same time, the less skilled partner increases human capital by learning from the more skilled colleague. With poor institutions at home, highly skilled individuals leave the country seeking better opportunities abroad. On the contrary, improved institutions foster return migration of emigrants who have acquired more knowledge while abroad. These return migrants greatly amplify the positive effect of better institutions.
    JEL: F22 C78 O15 J61
    Date: 2007–11
  12. By: Borgman, Benny (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: The U.S. is traditionally viewed as an economy driven by entrepreneurs, whereas the Swedish model is associated with high welfare ambitions and less focus on entrepreneurial activities. This paper seeks to empirically investigate whether the connection between entrepreneurship and growth at the regional level differs between the U.S. and Sweden. By regressing annual entrepreneurship on regional employment growth (and controlling for other conceivable variables impacting employment growth) entrepreneurship is shown to be positively and significantly associated with regional growth in both countries in the 1990s. Still, the result is more robust for the U.S. Other important variables for regional growth is business density and, in the case of the U.S., educational levels and internal scale economies.
    Keywords: Entrepreneurship; Knowledge spillovers; Regional growth
    JEL: M13 O57 R11
    Date: 2007–12–11

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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