nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒04‒21
eleven papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Beyond Signaling and Human Capital: Education and the Revelation of Ability By Peter Arcidiacono; Patrick Bayer; Aurel Hizmo
  2. Firm-Level Social Returns to Education By Pedro S. Martins; Jim Jin
  3. Lifelong learning – an essential premise for building a society and economy based on knowledge By Todorut, Amalia Venera
  4. Life Expectancy and Human Capital Investments: Evidence From Maternal Mortality Declines By Seema Jayachandran; Adriana Lleras-Muney
  5. A Portrait of the Innovative Firm as a Small Patenting Entrepreneur By Andersson, Martin; Lööf, Hans
  6. The Impact of College Graduation on Geographic Mobility: Identifying Education Using Multiple Components of Vietnam Draft Risk By Malamud, Ofer; Wozniak, Abigail
  7. Public Expenditure - The Base for Education Development By Floristeanu, Elena
  8. Implementing Value-Added Models of School Assessment By Maciej Jakubowski
  9. The Knowledge Economy/Society: The Latest Example of “Measurement Without Theory”? By Les Oxley; David Thorns; Paul Walker; Hong Wang
  10. Studying Abroad and the Effect on International Labor Market Mobility: Evidence from the Introduction of ERASMUS By Parey, Matthias; Waldinger, Fabian
  11. Overeducation Among Swedish Youth By Bourdet , Yves; Persson, Inga

  1. By: Peter Arcidiacono; Patrick Bayer; Aurel Hizmo
    Abstract: In traditional signaling models, education provides a way for individuals to sort themselves by ability. Employers in turn use education to statistically discriminate, paying wages that reflect the average productivity of workers with the same given level of education. In this paper, we provide evidence that education (specifically, attending college) plays a much more direct role in revealing ability to the labor market. We use the NLSY79 to examine returns to ability early in careers; our results suggest that ability is observed nearly perfectly for college graduates but is revealed to the labor market much more gradually for high school graduates. As a result, from very beginning of the career, college graduates are paid in accordance with their own ability, while the wages of high school graduates are initially completely unrelated to their own ability. This view of ability revelation in the labor market has considerable power in explaining racial differences in wages, education, and the returns to ability. In particular, we find no racial differences in wages or returns to ability in the college labor market, but a 6-10 percent wage penalty for blacks (conditional on ability) in the high school market. These results are consistent with the notion that employers use race to statistically discriminate in the high school market but have no need to do so in the college market. That blacks face a wage penalty in the high school but not the college labor market also helps to explains why, conditional on ability, blacks are more likely to earn a college degree, a fact that has been documented in the literature but for which a full explanation has yet to emerge.
    JEL: J15 J24 J3 J7
    Date: 2008–04
  2. By: Pedro S. Martins; Jim Jin
    Abstract: Do workers benefit from the education of their co-workers? We examine this question first by introducing a model of learning, which argues that educated workers may transfer part of their general skills to uneducated workers, and then by examining detailed matched employeremployee panel data from Portugal. We find evidence of large firm-level social returns (between 14% and 23%), much larger than standard estimates of private returns, and of significant returns accruing to less educated workers but not to their more educated colleagues.
    Keywords: Education Spillovers, Matched Employer-Employee Data, Endogenous Growth
    JEL: J24 J31 I20
    Date: 2008–05
  3. By: Todorut, Amalia Venera
    Abstract: The transformation of knowledge in an essential element of social activities, its multiple functions and economic roles – a quasi-universal starting material, a capital and essential way of work with the tendency of having a prevailing role in firms and product – is normally reflected in the permanent attempt to intensify the processes of obtaining them. Maybe the most conclusive expression of this tendency is represented, in the last decades, by the permanent lifelong learning outline or by the whole period of life as an essential component of realizing a favorable environment for the economy based on knowledge. The object of lifelong learning is to ensure and maintain the individual skills and abilities and their improvement as the content of work, the technology and the professional requirements are changing, achieving the employees’ carriers and individual development, making increases in productivity and aggregate incomes and, at the same time, the improvement of social equity. The characteristics of lifelong learning are very significant: the universality of learning, the innovation in the content and method of learning and the environment of individual learning. A fundamental change is imposed on politics and development in what concerns learning and education, thus, all the people should have access to the lifelong learning and the opportunity of using it effectively. We propose, during our work, to identify the provocations at the level of education in an economy based on knowledge.
    Keywords: knowledge lifelong education development innovation
    JEL: I2
    Date: 2008
  4. By: Seema Jayachandran; Adriana Lleras-Muney
    Abstract: Longer life expectancy should encourage human capital accumulation, since a longer time horizon increases the value of investments that pay out over time. Previous work has been unable to determine the empirical importance of this life-expectancy effect due to the difficulty of isolating it from other effects of health on education. We examine a sudden drop in maternal mortality risk in Sri Lanka between 1946 and 1953, which creates a sharp increase in life expectancy for school-age girls without contemporaneous effects on health, and which also allows for the use of boys as a control group. Using additional geographic variation, we find that the 70% reduction in maternal mortality risk over the sample period increased female life expectancy at age 15 by 4.1%, female literacy by 2.5%, and female years of education by 4.0%.
    JEL: I10 I20 O15
    Date: 2008–04
  5. By: Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper examines small innovative entrepreneurs by contrasting patenting firms against non-patenting firms. The empirical analysis is based on new and unique data on internal attributes, location and international trade characteristics for over 20 000 manufacturing firms in Sweden with 1-25 employees. Our main findings are that firms’ access to financial means, human capital and trade with R&D-intensive economies correlate highly significant with their propensity to be engaged in innovation activities, as evidenced by patent applications. Interestingly, when controlling for firm attributes we do not find any significant effect of the local milieu on innovativeness among micro and very small firms.
    Keywords: Entrepreneurship; Innovation and Invention; Intellectual Property Rights; SMEs; Technology Transfer; Location; Agglomeration
    JEL: F43 L26 M13 O31 O34
    Date: 2008–04–09
  6. By: Malamud, Ofer (University of Chicago); Wozniak, Abigail (University of Notre Dame)
    Abstract: College-educated workers are twice as likely as high school graduates to make lasting long-distance moves, but little is known about the role of college itself in determining geographic mobility. Unobservable characteristics related to selection into college might also drive the relationship between college education and geographic mobility. We explore this question using a number of methods to analyze both the 1980 Census and longitudinal sources. We conclude that the causal impact of college completion on subsequent mobility is large. We introduce new instrumental variables that allow us to identify educational attainment and veteran status separately in a sample of men whose college decisions were exogenously influenced by their draft risk during the Vietnam War. Our preferred IV estimates imply that graduation increases the probability that a man resides outside his birth state by approximately 35 percentage points, a magnitude nearly twice as large as the OLS migration differential between college and high school graduates. IV estimates of graduation’s impact on total distance moved are even larger, with IV estimates that exceed OLS considerably. We provide evidence from the National Longitudinal Survey of Youth (NLSY) 1979 that our large IV estimates are plausible and likely explained by heterogeneous treatment effects. Finally, we provide some suggestive evidence on the mechanisms driving the relationship between college completion and mobility.
    Keywords: geographic mobility, education, college graduates, internal migration, instrumental variables
    JEL: J61 J24 I23
    Date: 2008–04
  7. By: Floristeanu, Elena
    Abstract: The paper advances the idea that although at a regional and global level education is considered to be a promoter of progress and development the investments in this field differ very much. A comparative analysis of education expenses of different countries form all over the world is done in terms of the objectives and indicators measuring the financing initiatives. The results are used as an argument showing that the educational systems need global, public and private support. At the same time, they reinforce the idea that sustainable highly competitive human resources can not be generated unless there are sufficient financial resources.
    Keywords: education; financing; resources; public expenditure; private expenditure
    JEL: H0 H52
    Date: 2008–04–17
  8. By: Maciej Jakubowski
    Abstract: This paper considers value-added models of school assessment and their implementation in Poland. Value-added estimates can be very helpful for schools and policy makers who need a reliable way to control teaching effectiveness, or for parents who need information about school quality in their area. However, their usefulness depends on several statistical issues and specific decisions made during implementation. The paper discusses several value-added models and describes details of the solution implemented in Poland. Statistical problems are discussed according to their policy relevance. It is shown that what bothers statisticians is less important in practice than several problems encountered when one wants to apply these models to a policy relevant context. Problems of proper regression specification, omitted variables bias, and measurement error are discussed, but the ways value-added estimates could be published and used as policy evaluation tools are also presented. All this problems are discussed from a practical point of view using three years of experience in implementation of these methods in Poland.
    Keywords: education, school assessment, school effectiveness, value-added models
    JEL: I21 I28 J24
    Date: 2008–02–19
  9. By: Les Oxley (University of Canterbury); David Thorns; Paul Walker; Hong Wang
    Abstract: The world has embraced a set of concepts (knowledge driven growth) which are seen as the ‘core of future growth and wellbeing’ without any commonly agreed notion of what they are, how they might be measured, and crucially therefore, how they actually do (or might) affect economic growth and social wellbeing. The theory of how the mechanism works lacks important detail.
    Keywords: Knowledge Economy; Knowledge Society; Human Capital; Theory of the Firm
    JEL: D8 D21 L22 L23 O31
    Date: 2008–02–26
  10. By: Parey, Matthias (University College London); Waldinger, Fabian (CEP, London School of Economics)
    Abstract: We investigate the effect of studying abroad on international labor market mobility later in life for university graduates. As a source of identifying variation, we exploit the introduction and expansion of the European ERASMUS student exchange program, which significantly increases a student’s probability of studying abroad. Using an Instrument Variable approach we control for unobserved heterogeneity between individuals who studied abroad and those who did not. Our results indicate that student exchange mobility is an important determinant of later international labor market mobility: We find that studying abroad increases an individual’s probability of working in a foreign country by about 15 to 20 percentage points, suggesting that study abroad spells are an important channel to later migration. We investigate heterogeneity in returns and find that studying abroad has a stronger effect for credit constrained students. Furthermore, we suggest mechanisms through which the effect of studying abroad may operate. Our results are robust to a number of specification checks.
    Keywords: international mobility, migration, student exchange, education
    JEL: J61 I2 F22
    Date: 2008–04
  11. By: Bourdet , Yves (Department of Economics, Lund University); Persson, Inga (Department of Economics, Lund University)
    Abstract: In this paper we analyse the changes that have taken place on the supply and demand sides of the Swedish labour market during recent decades, with particular focus on youths and the extent to which Swedish youths have become “overeducated”. We first provide an overview of theoretical and measurement issues related to the concept of overeducation. Against this background we then survey some of the findings from earlier studies of the evolution of the demand and supply of skills in Sweden and of the extent and character of over- and undereducation. We then look specifically at overeducation among Swedish youths during their labour market entrance and early career and discuss the main issues related to overeducation that have been raised in the Swedish public debate.
    Keywords: Overeducation; mismatch; wage-premium; youth employment; Sweden
    JEL: J21 J24 J31
    Date: 2008–01–31

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