nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒03‒08
thirteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. How to interpret the growing phenomenon of private tutoring : human capital deepening, inequality increasing, or waste of resources ? By Rogers, F. Halsey; Dang, Hai-Anh
  2. Diversity of human capital attributes and diversity of remunerating systems By Fatima Suleman; Jean-Jacques Paul
  3. Skill Composition: Exploring a Wage-based Skill Measure By Øivind A. Nilsen, Arvid Raknerud, Marina Rybalka and Terje Skjerpen
  4. Apprenticeship Training – What for? Investment in Human Capital or Substitute for Cheap Labour? By Jens Mohrenweiser; Uschi Backes-Gellner
  5. The Costs of Hiring Skilled Workers By Samuel Mühlemann; Marc Blatter; Samuel Schenker
  6. The Effect of Education on In-prison Conflict:Evidence from Argentina By Edgar Villa; María Laura Alzúa; Catherine Rodríguez
  7. Does parental employment affect children's educational attainment? By Hörisch, Hannah
  8. The Economics and Psychology of Personality Traits By Borghans Lex; Lee Duckworth Angela; Heckman James J.; Weel Bas ter
  9. Changing Returns to Education During a Boom? The Case of Ireland By Seamus McGuinness; Frances McGinnity; Philip J. O'Connell
  10. Skill-based technology adoption: firm-level evidence from Brazil and India By Rupert Harrison
  11. Production Offshoring and the Skill Composition of Italian Manufacturing Firms: A Counterfactual Analysis By Roberto Antonietti; Davide Antonioli
  13. Does Social Capital Mitigate Precariousness? By Fabio Sabatini

  1. By: Rogers, F. Halsey; Dang, Hai-Anh
    Abstract: Private tutoring is now a major component of the education sector in many developing countries, yet education policy too seldom acknowledges and makes use of it. Various criticisms have been raised against private tutoring, most notably that it exacerbates social inequalities and may even fail to improve student outcomes. This paper surveys the literature for evidence on private tutoring-the extent of the tutoring phenomenon, the factors that explain its growth, and its cost-effectiveness in improving student academic performance. It also presents a framework for assessing the efficiency and equity effects of tutoring. It concludes that tutoring can raise the effectiveness of the education system under certain reasonable assumptions, even taking into account equity concerns, and it offers guidance for attacking corruption and other problems that diminish the contributions of the tutoring sector.
    Keywords: Teaching and Learning,Tertiary Education,Education For All,Primary Education,
    Date: 2008–02–01
  2. By: Fatima Suleman (DINAMIA - Centro de Estudos sobre a Mudança Socioeconómica - Université de Lisbonne); Jean-Jacques Paul (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - CNRS : UMR5225 - Université de Bourgogne)
    Abstract: This paper aims at comparing the respective impact of the traditional Human Capital Variables (HCV) and of competences explicitly assessed on employees’ remuneration. The data are derived from an original survey conducted in five large banking companies in Portugal. Six hundred clerks were interviewed regarding their individual characteristics (age, gender, education, experience in the labour market, experience in the company). Their respective supervisors were asked to assess their competences using a list of thirty skills. Complementary models are used in this research, relating to earnings and the distribution of profit shares to employees. Analyses take the specific structure of the multilevel data into account. These different dimensions show that traditional human capital variables are important determinants for earnings, whereas competences explain the profit shares distributed to employees.
    Keywords: Earnings ; Human capital ; Competences ; Profit sharing ; Banking sector ; Portugal
    Date: 2008–03
  3. By: Øivind A. Nilsen, Arvid Raknerud, Marina Rybalka and Terje Skjerpen (Statistics Norway)
    Abstract: Most studies of heterogeneous labor inputs use classifications of high skilled and low skilled based on workers' educational attainment. In this study we explore a wage-based skill measure using information from a wage equation. Evidence from matched employer--employee data show that skill is attributable to many variables other than educational length, for instance experience and type of education. Applying our wage-based skill measure to a TFP growth analysis, we find that the TFP residual decreases, indicating that more of the change in value-added is picked up by our skill measure than when using a purely education-based measure of skill
    Keywords: Skill composition; wages; TFP
    JEL: J31 D24 C23
    Date: 2008–02
  4. By: Jens Mohrenweiser (Institute for Strategy and Business Economics, University of Zurich); Uschi Backes-Gellner (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: Apprenticeship training in Germany is generally considered to be an investment of companies in the human capital of their apprentices. This view is mainly based on the German cost benefit studies which find that firms bear high net costs for their apprenticeships. But these results have not been confirmed by other types of data or methods so far. We derive an empirical method to distinguish between firms which train for investment reasons or which are driven by a substitution strategy. The data which are necessary for our approach are readily available in most company panel data bases. According to our classification, we find that 18.5 percent of all companies follow a substitution strategy and 43.75 percent follow an investment strategy; the rest is mixed or undetermined. In a second step we also estimate the determinants for a substitution strategy. We find sizeable differences between sectors with different skill requirements and between firms’ coverage of industrial relations. We conclude that only part of German apprenticeship training entails a human capital investment for the company and that this fact has to be adequately taken into account in any theoretical or empirical analysis of apprenticeship training.
    Keywords: Apprenticeship Training, Human Capital Investments, Substitution Effects
    JEL: I21 J24 J63
    Date: 2008–03
  5. By: Samuel Mühlemann (Institute of Economics, University of Berne); Marc Blatter (Institute of Economics, University of Berne); Samuel Schenker (Institute of Economics, University of Berne)
    Abstract: The shape of adjustment costs in factor demand has been a matter of controversy for quiet some time. While some researchers assume quadratic adjustment costs, i.e. that it becomes increasingly expensive to recruit workers in a given time period, others believe that there are economies of scale in recruitment. Surprisingly, there is hardly any evidence so far on the shape of hiring costs based on microeconomic data. In this paper we estimate the functional form of hiring costs in the theoretical framework of a generalized model of monopsony, using both parametric and nonparametric estimation techniques. We find strong evidence in favor of diseconomies of scale in recruiting skilled workers. Our results indicate that the labor market is monopsonistic.
    Keywords: Hiring costs, generalized monopsony
    JEL: J32 J42 J63
    Date: 2008–03
  6. By: Edgar Villa; María Laura Alzúa; Catherine Rodríguez
    Abstract: Using census data for Argentine prisons for the period 2002-2005, this paper presents evidence of the positive e¤ect that prisoner education programs (pri- mary and some part of secondary schooling) have on in prison conflictivity measured as sanctions or violent behavior of the prisoner. In order to over- come the problems of endogeneity that education decisions generate we use an instrumental variables approach. Our results show a decrease in partici- pation in violent conflicts and bad behavior which can be partially attributed to education.
    Date: 2008–01–31
  7. By: Hörisch, Hannah
    Abstract: This paper analyzes whether there exists a causal relationship between parental employment and children's educational attainment. We address potential endogeneity problems due to (i) selection of parents in the labor market by estimating a model on sibling differences and (ii) reverse causality by focusing on parents' employment when children are aged 0-3. We use data from the German Socioeconomic Panel. Overall, we find little support that parental employment affects children's educational attainment. We can rule out that having a mother who works one hour more per week lowers the probability of high secondary track attendance by more than 0.1%.
    Keywords: sibling differences; educational attainment; child care
    JEL: C20 I21 J13
    Date: 2008–02–26
  8. By: Borghans Lex; Lee Duckworth Angela; Heckman James J.; Weel Bas ter (ROA rm)
    Abstract: This paper explores the interface between personality psychology andeconomics. We examine the predictive power of personality and the stability ofpersonality traits over the life cycle. We develop simple analytical frameworksfor interpreting the evidence in personality psychology and suggest promisingavenues for future research.
    Keywords: education, training and the labour market;
    Date: 2008
  9. By: Seamus McGuinness (Economic and Social Research Institute (ESRI)); Frances McGinnity (Economic and Social Research Institute (ESRI)); Philip J. O'Connell (Economic and Social Research Institute (ESRI))
    Abstract: Ireland’s “Celtic Tiger” years saw GDP per capita rise from 60% of the EU average to 120% of the average over the course of the 1990s, with a growth in employment of about 40% over the period 1994-2001. What were the consequences of the boom for returns to education and wage inequality? This paper uses data from the Living in Ireland Survey for 1994, 1997 and 2001 to examine wage inequality, the returns to education and the relative demand for labour for men and women. Theories of skilled-biased technical change suggest that the rapid period of economic growth experienced in Ireland will have been accompanied by a rise in the relative demand for skilled labour that will, in turn, have led to rising wage inequality. However, this is not the case for this period. We find fairly stable returns to education and falling wage inequality for men throughout the period, partly explained by a rapid growth in demand for unskilled labour, which helped maintain low-skilled wages. For women we find some fall in the wage premium to a university degree and falling wage inequality in the period 1997-2001. We argue that for women, low-skilled wages were kept up by the introduction of the minimum wage in 2000, and high skilled wages fell due to a rapid rise in the supply of highly qualified women. The Irish example shows that skill-biased technical change theory needs to take account of both the specific changes in the nature of labour demand and the nature and extent of concomitant changes in labour supply.
    Date: 2008–02
  10. By: Rupert Harrison (Institute for Fiscal Studies)
    Abstract: <p><p><p>This paper provides the first firm-level econometric evidence on the skill-bias of ICT in developing countries using a unique new dataset of manufacturing firms in Brazil and India. I use detailed information on firms' adoption of ICT and the educational composition of their workforce to estimate skill-share equations in levels and long differences. The results are strongly suggestive of skill-biased ICT adoption, with ICT able to explain up to a third of the average increase in the share of skilled workers in Brazil and up to one half in India. I then use variation in the relative supply of skilled workers across states within each country to identify the skill-bias of ICT. The results are again consistent with skill-bias in both countries, and are mainly robust to various methods of controlling for unobserved heterogeneity across states. The magnitudes of the estimated effects from both approaches are surprisingly similar for the two countries. Overall, the results suggest that new developments in ICT are diffusing rapidly through the manufacturing sectors of both Brazil and India, with similar implications for the demand for skills in two very different and geographically distant countries. This evidence is consistent with ongoing pervasive skill-biased technological change associated with ICT throughout much of the developed and developing world. The implications for future developments in inequality both within and between countries are potentially far-reaching.</p></p></p>
    JEL: J2 O14 O33
    Date: 2008–02
  11. By: Roberto Antonietti (University of Padua); Davide Antonioli (University of Ferrara)
    Abstract: This work explores the effects of cross-border relocation of production on the skill composition of Italian manufacturing firms. Its aim is to assess if the firms’ strategy to offshore production activities towards cheap labor countries determines a bias in the relative employment of skilled versus unskilled workers. Using a balanced panel of firm-based data across the period 1995-2003, we test this skill-bias hypothesis by means of a counterfactual experiment in which we employ a difference-in-differences propensity score matching estimator in order to control for selectivity bias without relying on a specific functional form of the relations of interest. In line with the literature, our results point to confirm a general, although weak, skill bias effect of production offshoring on the labor-force composition of Italian manufacturing: in particular, we find that firms farming out production stages in 1998-2000 show an upward shift in the skill ratio with respect to the counterfactual of firms not moving their production abroad. However, when we look at the single components of the skill ratio, we find that the skill bias effect is primarily driven by a fall in the employment of production workers, while a weak or not significant effect is found with respect to the employment of skilled personnel.
    Keywords: Production Offshoring, Skill Bias, Difference-in-Differences, Propensity
    JEL: J24 F16 L24
    Date: 2007–11
  12. By: Henrekson, Magnus (Dept. of Economics, Stockholm School of Economics); Waldenström, Daniel (Research Institute of Industrial Economics (IFN))
    Abstract: Billions of euros are allocated every year to university research. Increased specialisation and international integration of research and researchers has sharply raised the need for comparisons of performance across fields, institutions and individual researchers. However, there is still no consensus regarding how such rankings should be conducted and what output measures are appropriate to use. We rank all full professors in a particular discipline, economics, in one European nation using seven established, and some of them commonly used, measures of research performance. Our examination shows both that the rank order can vary greatly across measures, and that depending on the measure used the distribution of total research out-put is valued very differently. The renowned KMS measure in economics stands out among the measures analysed here. It exhibits the weakest correlation with the others used in our study. We conclude by giving advice to funding councils and others assessing research quality on how to think about the use of both quantitative and qualitative measures of performance.
    Keywords: Impact of research; Ranking; Research productivity; Bibliometrics; Impact Factor
    JEL: A11 A14 B41
    Date: 2008–03–04
  13. By: Fabio Sabatini (University of Siena)
    Abstract: There is a surprising gap in the economic literature on social capital. First, we lack studies addressing the effects of social capital on those facets of development that can contribute in making growth more sustainable in the long run, like, for example, human development and social cohesion. Second, it is still unclear what type of networks may exert a positive effect on the different dimensions of development. In particular, the literature has not yet provided a rigorous assessment of the role of strong family ties, that are generally referred to as a form of bonding social capital causing backwardness. This paper carries out an empirical investigation into the relationship between the three types of social capital so far identified by the literature (i.e. bonding, bridging and linking), human development, and labour precariousness, in the belief that precariousness and uncertainty play a crucial role in determining the social cohesion and well-being that are necessary to make growth sustainable in the long run.
    Keywords: Social capital, Human development, Labour market, Precariousness, Italy
    JEL: J24 O15 Z13
    Date: 2008–01

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.