nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒02‒23
twelve papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. The human capital that matters: expected returns and the income of affluent households By Sean D. Campbell; George M. Korniotis
  2. Where Do the Brainy Italians Go? By Amelie Constant; Elena D'Agosto
  3. What is the Value of Entrepreneurship? A Review of Recent Research By C. Mirjam van Praag; Peter H. Versloot
  4. The Relationship between Entrepreneurship and Unemployment in Japan By André van Stel; Roy Thurik; Ingrid Verheul; Lendert Baljeu
  5. Rapid Growth in the CIS: Is It Sustainable? By Garbis Iradian
  6. New Zealand: Modernising Schools in a Decentralised Environment By Bruce Sheerin
  7. Impact of school quality on child labor and school: the case of CONAFE Compensatory Education Program in Mexico By F. Rosati; M. Rossi
  8. Dynamic Adjustments to Terms of Trade Shocks: The USA Productivity Boom and Australia By Richard G. Harris; Peter E. Robertson
  9. Accessibility and affordability of tertiary education in Brazil, Colombia, Mexico and Peru within a global context By Blom, Andreas; Murakami, Yuki
  10. Changing School Architecture in Zurich By Mark Ziegler; Daniel Kurz
  11. Modernising Portugal’s Secondary Schools By Teresa V. Heitor
  12. Recruitment of Seemingly Overeducated Personnel: Insider-Outsider Effects on Fair Employee Selection Practices By Fabel, Oliver; Pascalau, Razvan

  1. By: Sean D. Campbell; George M. Korniotis
    Abstract: We implement the human capital CAPM (HCAPM) using the income growth of high income households, rather than aggregate income growth, to proxy the return to human capital (HCRT). We find that identifying the HCRT with the income growth of affluent households, those who are most likely to hold stocks, substantially improves the performance of the HCAPM. Specifically, the pricing errors, R-square’s, average returns on factor mimicking portfolios, and performance relative to other macro-finance models uniformly improve as the HCRT is identified with the income growth of successively more affluent households.
    Date: 2008
  2. By: Amelie Constant; Elena D'Agosto
    Abstract: This paper studies the major determinants that affect the country choice of the talented Italian scientists and researchers who have at least a bachelor's from Italy and live abroad. There are three alternative country choices: the US/Canada, the UK, and other EU countries. On average, the brainy Italians exhibit a higher predicted probability to go to the US. Ceteris paribus, both push and pull factors are important. While having a Ph.D. from outside Italy predicts the UK choice, having extra working experience from outside Italy predicts migration to other EU countries. Those who stay abroad temporarily for two to four years are definitely more likely to go to the UK. Specialization in the fields of humanities, social sciences, and health are strong determinants of migration to the UK. For the move to the US, while the humanities area is a significant deterrent, health is a positive deciding factor. Lack of funds in Italy constitutes a significant push to the US.
    Keywords: Brain drain, skilled migration, Italy, push-pull factors
    JEL: J61 J24 F22
    Date: 2008
  3. By: C. Mirjam van Praag (University of Amsterdam); Peter H. Versloot (University of Amsterdam)
    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; research; development; utility; remuneration; income
    JEL: J01 L26
    Date: 2007–08–27
  4. By: André van Stel; Roy Thurik; Ingrid Verheul (Erasmus University Rotterdam, and EIM, Zoetermeer); Lendert Baljeu (Erasmus University Rotterdam)
    Abstract: This paper examines the relationship between entrepreneurship (as measured by fluctuations in the business ownership rate) and unemployment in Japan for the period between 1972 and 2002. We find that, although Japan’s unemployment rate has been influenced by specific exogenous shocks, the effects of entrepreneurship on unemployment are not different when compared to other OECD countries. In the past, small firms in Japan benefited from the protective environment of the keiretsu structure. This secure environment no longer exists, and a new market environment conducive to new venture creation and growth has not yet been established. We argue that the Japanese government should actively stimulate an entrepreneurial culture.
    Keywords: entrepreneurship; business ownership; unemployment; Japan
    JEL: J23 J64 L26 O11 O53
    Date: 2007–10–11
  5. By: Garbis Iradian
    Abstract: This paper analyses some of the main factors behind the recent rapid growth in the Commonwealth of Independent States (CIS) and the prospects for its continuation. Two approaches are used. The first approach uses growth accounting exercises to estimate the total factor productivity (TFP) growth of all transition economies and compare them with other fast-growing economies. The second approach uses panel regression to estimate the determinants of per capita and TFP growth for 90 countries. Both short-run and long run coefficients are estimated using fixed effects, random effects, and two stage least squares (2SLS) econometric techniques. The central conclusion of the study is that the rapid growth of the CIS countries over the past six years has been driven primarily by improvement in labour productivity, increases in capacity utilization, recovery of previously lost output, favourable commodity prices, and large increases in remittances. This strong growth may continue over the next few years. Why? First, the still relatively low real GDP base and low average per capita means that there is more catch-up potential. Second, the recent trend of faster capital accumulation is expected to play a more important role in the medium-term growth. Third, education levels are relatively much higher than in other regions. There is a downside risk, however, arising from the high concentration of exports in a few commodities. The undiversified export structure and the terms-of-trade gains may expose the CIS countries to considerable external risks. The challenge, therefore, will be to improve the investment climate in the non-primary sectors. Improving the investment climate will require further progress in implementing structural reform and strengthening institutional development. The undiversified export structure and the terms-of-trade gains may expose the CIS countries to considerable external risks. As time passes, the share of growth derived from improved resource allocation may diminish gradually and long-term rapid growth will be increasingly dependent on physical and human capital accumulation.
    Keywords: growth, TFP, remittances, institutions
    JEL: F1 O47 F20 N7
    Date: 2007–02
  6. By: Bruce Sheerin
    Abstract: The government of New Zealand delegates property expenditure decisions to each individual school. Such a decentralised environment creates a challenge for school boards and principals to obtain advice on the complex issues around designing schools. To inform schools, the Ministry of Education provides numerous publications related to design and selected best practice samples via its website.
    Keywords: decentralisation, learning environment, educational buildings, school infrastructure
    Date: 2008–02
  7. By: F. Rosati; M. Rossi
    Abstract: This paper focuses on the impact that two different types of policy interventions, namely enhancing school quality and contingent cash transfers , have on child labour and school attendance in Mexico. While there are many studies on the impact of Oportunidades on schooling outcomes, little evidence is available on whether school quality programs such as CONAFE also reduce child labour and help keep children in school. To carry out the analysis, we merge the Oportunidades panel dataset for the years 1997 to 2000 to the CONAFE dataset containing detailed information on the school quality program components. The econometric strategy involves a bivariate probit model for child labor and schooling, both for primary school aged children and adolescents. In this way, we are able to control whether the impact of the program on schooling differs according to the age of the targeted child. Our findings suggest that school quality programs are not only effective in increasing school attendance, but also act as derrents to child labor, especially for children of secondary school age.
    Date: 2007–09
  8. By: Richard G. Harris (Department of Economics, Simon Fraser University); Peter E. Robertson (School of Economics, The University of New South Wales)
    Abstract: How has the USA’s “new economy” productivity boom affected Australia? We consider this question using a dynamic multi-sector growth model of the Australian and USA economies. We find that productivity growth in the USA durables sector generates small but important gains to Australia. We find that the transmission of growth is generated through increased export demand for Agriculture. Consequently we find that the USA’s productivity growth tends to favour Australia’s traditional export sectors. Likewise it increases the relative demand for less skilled labour in Australia and reduces the demand for skilled labour and higher education.
    Keywords: Terms of Trade; Productivity; Economic Growth; Human Capital; Computable General Equilibrium Models
    Date: 2007–06
  9. By: Blom, Andreas; Murakami, Yuki
    Abstract: This paper examines the financing of tertiary education in Brazil, Colombia, Mexico and Peru, comparing the affordability and accessibility of ter tiary education with that in high-income countries. To measure affordability, the authors estimate education costs, living costs, grants, and loans. Further, they compute the participation rate, attainment rate, and socio-economic equity index in education and the gender equity index as indicators of accessibility. This is the first study attempting to estimate affordability of tertiary education in Latin America within a global context. The analysis combines information from household surveys, expenditure surveys, and administrative and institutional databases. The findings show that families in Latin America have to pay 60 percent of per-capita income for tertiary education per student per year compared with 19 percent in high-income countries. Living costs are significant, at 29 percent of gross domestic product per capita in Latin America (19 percent in high-income countries). Student assistance through grants and loans plays a marginal role in improving affordability. Moreover, the paper confirms previous findings of low access to tertiary education in the region. One policy implication of the findings is that Latin American governments could take steps to make tertiary education more affordable through student assistance.
    Keywords: Tertiary Education,,Access & Equity in Basic Education,Access to Finance,Teaching and Learning
    Date: 2008–02–01
  10. By: Mark Ziegler; Daniel Kurz
    Abstract: Changes in the way education is delivered has contributed to the evolution of school architecture in Zurich, Switzerland. The City of Zurich has revised its guidelines for designing school buildings, both new and old. Adapting older buildings to today’s needs presents a particular challenge. The authors explain what makes up a good school building and provide a set of design recommendations.
    Keywords: school building design, learning environment, educational buildings, school infrastructure
    Date: 2008–02
  11. By: Teresa V. Heitor
    Abstract: In March 2007, the Portuguese government announced an ambitious plan to modernise secondary schools by improving the quality and usefulness of its teaching and learning facilities, while putting schools back into the centre of the community of which they are an integral part.
    Keywords: innovation, reforms, secondary schools, school building design, learning environment, educational buildings
    Date: 2008–02
  12. By: Fabel, Oliver; Pascalau, Razvan
    Abstract: We analyze a standard employee selection model given two institutional constraints: First, professional experience perfectly substitutes insufficient formal education for insiders while this substitution is imperfect for outsiders. Second, in the latter case the respective substitution rate increases with the advertised minimum educational requirement. Optimal selection implies that the expected level of formal education is higher for outsider than for insider recruits. Moreover, this difference in educational attainments increases with lower optimal minimum educational job requirements. Investigating data of a large US public employer confirms both of the above theoretical implications. Generally, the econometric model exhibits a good fit.
    Keywords: employee selection; overeducation; adverse impact; insiders vs outsiders
    JEL: I21 J78 M51 J53
    Date: 2007–10–24

This nep-hrm issue is ©2008 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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