nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒04‒29
eighteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Human capital—economic growth nexus in the former Soviet Bloc By Osipian, Ararat
  2. The century of education By Christian Morrisson; Fabrice Murtin
  3. The (non)Theory of the Knowledge Firm By Paul Walker
  4. Spatial Growth Volatility and Age-structured Human Capital Dynamics in Europe. By Mamata Parhi; Tapas Mishra
  5. Women's Liberation: What's in It for Men? By Doepke, Matthias; Tertilt, Michèle
  6. Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform By Edmonds, Eric V; Pavcnik, Nina; Topalova, Petia
  7. Public Expenditure - The Base for Education Development By Floristeanu, Elena
  8. Migration Enclaves, Schooling Choices and Social Mobility By Piacentini, Mario
  9. Education and Poverty in Vietnam: a Computable General Equilibrium Analysis By Marie-Hélène Cloutier; John Cockburn; Bernard Decaluwé
  10. The “Bologna Process” and College Enrolment Decisions By Cappellari, Lorenzo; Lucifora, Claudio
  11. Education in Russia: The evolution of theory and practice By Natalia Kuznetsova; Irina Peaucelle
  12. Too Young to Leave the Nest? The Effects of School Starting Age By Black, Sandra E.; Devereux, Paul; Salvanes, Kjell G.
  13. Misdeeds in the US higher education: Illegality versus corruption By Osipian, Ararat
  14. Pitfalls of Participatory Programs: Evidence from a Randomized Evaluation in Education in India By Banerjee, Abhijit; Banerji, Rukmini; Duflo, Esther; Glennerster, Rachel; Khemani, Stuti
  15. The Contribution of Vocational Training to Employment, Job-Related Skills and Productivity: Evidence from Madeira Island By Budria, Santiago; Pereira, Pedro T.
  16. Impact of Special Economic Zones on Employment, Poverty and Human Development By Aradhna Aggarwal
  17. Analysis of Human Development Indicators In Libya By Alrubaie, Falah
  18. Strategy-proofness vs. Efficiency in Matching with Indifferences: Redisigning the NYC High School Match By Atila Abdulkadiroglu; Parag A Pathak; Alvin E Roth

  1. By: Osipian, Ararat
    Abstract: This study analyses the role of education in economic development in the republics of the former Socialist Bloc and more specifically the impact of human capital on per capita economic growth in transition economies in the Russian Federation, and Ukraine. The factors that are associated with the human capital in terms of education levels are analyzed in order to measure this impact. Our approach is to estimate the significance of educational levels for initiating substantial economic growth. We estimate a system of linear and log-linear equations accounting for different time lags in the possible impact of human capital on economic growth.
    Keywords: education; human capital; growth; transition; Russia; Ukraine
    JEL: O47 P24 J24
    Date: 2007–01–01
  2. By: Christian Morrisson; Fabrice Murtin
    Abstract: This paper presents an historical database on educational attainment in 74 countries for the period 1870-2010. We use data on total enrolment in Primary, Secondary and at University to estimate average years of schooling using perpetual inventory methods. Several difficulties arise due to missing data. We use some simulations to assess the quality of schooling estimates and show that most of them become reliable around 1900. Then, we extend our series over the period 1960-2010 using Cohen and Soto (2007) database, which relies mainly on surveys. The correlation between the two sets of average years of schooling in 1960 is equal to 0.96. We use a measurement error framework to merge the two databases while correcting a systematic measurement bias in Cohen and Soto (2007); the latter comes from the fact that surveys conducted in the 1990s were used to infer average schooling in 1960 without taking into account differential mortality across educational groups. Basic descriptive statistics show a continuous spread of education that has accelerated in the second half of the twentieth century. We find evidence of fast convergence in years of schooling for a sub-sample of advanced countries during the 1870-1914 globalization period, and of modest convergence since 1980. Less advanced countries have been excluded from the convergence club in both cases.
    Date: 2008
  3. By: Paul Walker (University of Canterbury)
    Abstract: This paper argues that the mainstream approaches to the theory of the firm do not provide a theory of the human capital based or knowledge based firm. We examine the textbook (neoclassical) theory of the firm, the transaction cost model, the incentive-system approach and the Grossman Hart Moore approach to the firm and argue that none of them are able to fully capture the changes to the firm that the movement towards a knowledge economy entails. We also consider the effects of knowledge on the location of production.
    Keywords: Theory of the firm; Knowledge economy; Human-capital based firm
    JEL: L14 L23
    Date: 2008–04–10
  4. By: Mamata Parhi; Tapas Mishra
    Abstract: In a semi-parametric spatial vector autoregressive setting this paper investigates the role of age-structured human capital on output comovements in Europe. Using the proportion of age-structured human capital growth and its degree of appropriations in output production as twin measures of distance, we find significant positive spatial growth volatility/persistence.
    Keywords: Spatial growth volatility, Non-linear growth, Age-structured human capital, Semi-parametric VAR.
    JEL: C14 C31 E61 J11 O47
    Date: 2008
  5. By: Doepke, Matthias; Tertilt, Michèle
    Abstract: The nineteenth century witnessed dramatic improvements in the legal rights of married women. Given that these changes took place long before women gained the right to vote, they amounted to a voluntary renouncement of power by men. In this paper, we investigate men's incentives for sharing power with women. In our model, women's legal rights set the marital bargaining power of husbands and wives. We show that men face a tradeoff between the rights they want for their own wives (namely none) and the rights of other women in the economy. Men prefer other men's wives to have rights because men care about their own daughters and because an expansion of women's rights increases educational investments in children. We show that men may agree to relinquish some of their power once technological change increases the importance of human capital. We corroborate our argument with historical evidence on the expansion of women's rights in England and the United States.
    Keywords: Economic Growth; Human Capital; Political Economy; Return to Education; Women's Rights
    JEL: D13 E13 J16 N30 O43
    Date: 2008–04
  6. By: Edmonds, Eric V; Pavcnik, Nina; Topalova, Petia
    Abstract: Does trade policy influence schooling and child labor decisions in low income countries? We examine this question in the context of India's 1991 tariff reforms. Overall, in the 1990s, rural India experienced a dramatic increase in schooling and decline in child labor. These trends were attenuated in communities where employment was concentrated in industries loosing tariff protection. The data suggest that this failure to follow the national trend of increasing schooling and diminishing work is associated with a failure to follow the national trend in poverty reduction. Schooling costs appear to play a large role in this relationship between poverty, schooling, and child labor. Extrapolating from our results, our estimates imply that roughly half of India's rise in schooling and a third of the fall in child labor during the 1990s can be explained by falling poverty and therefore improved capacity to afford schooling.
    Keywords: child labour; India; literacy; schooling; trade liberalization
    JEL: F13 F14 F16
    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: Piacentini, Mario
    Abstract: This paper investigates the presence of a network externality which might explain the persistence of low schooling achievements among internal migrants. A simple analytical framework is presented to show how an initial human capital disparity between migrants and non migrants can translate into persistent skill inequality if origin shapes the composition of social networks. We test empirically whether young migrantsschooling decisions are affected by the presence of covillagers at destination, using data on life-time histories of migration and education choices from a rural region of Thailand. Different modelling approaches are used to account for the self-selection of young migrants, for potential endogeneity of the network size, and for unobserved heterogeneity in individual preferences. The size of the migrant network is found to negatively affect the propensity of young migrants to pursue schooling while in the city. This fi…nding suggests that policies seeking to minimising strati…cation in enclaves might have a socially multiplied impact on schooling participation, and, ultimately, affect the socio-economic mobility of the rural born.
    Keywords: human capital; schooling; networks; migration; inequality
    JEL: O1 O10 O15
    Date: 2008–03–01
  9. By: Marie-Hélène Cloutier; John Cockburn; Bernard Decaluwé
    Abstract: Education is often promoted as the solution to poverty in the developing world. Yet, fiscal discipline has led to reductions in public spending on education. We examine the poverty impacts of a cut in public subsidies to higher education, accompanied by corresponding tax cuts, in a general equilibrium framework applied to Vietnam. This policy is shown to have strong and complex impacts through various channels: a direct increase in the private costs of higher education, a reduction in education investments, a shift in the economy's skills mix in favor of unskilled workers, a rise in the wage premium for skilled workers, education and consumer price changes, etc. When all of these contrasting impacts are taken into account, we find that a higher education subsidy cut reduces welfare and increases poverty in Vietnam. While rural and agricultural households would benefit from this reform, urban and non-agricultural households would lose out.
    Keywords: Computable general equilibrium model, public expenditures, education, Vietnam, welfare, poverty
    JEL: C68 H42 H52 I21 I32 J24 O53
    Date: 2008
  10. By: Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Lucifora, Claudio (Università Cattolica del Sacro Cuore)
    Abstract: We use survey data on cohorts of high school graduates observed before and after the Italian reform of tertiary education implementing the ‘Bologna process’ to estimate the impact of the reform on the decision to go to college. We find that individuals leaving high school after the reform have a probability of going to college that is 10 percent higher compared to individuals making the choice under the old system. We show that this increase is concentrated among individuals with good high-school performance and low parental (educational) background. We interpret this result as an indication of the existence of constraints (pre-reform) – for good students from less affluent household – on the optimal schooling decision. For the students who would not have enrolled under the old system we also find a small negative impact of the reform on the likelihood to drop-out from university.
    Keywords: university reforms, college enrolment, college drop-out
    JEL: I23 I28 J24
    Date: 2008–04
  11. By: Natalia Kuznetsova; Irina Peaucelle
    Abstract: This article investigates the relationships between the evolution of Russian social psychology and the transformations of the modes of education in Russia. Social psychology is a science born the last century and also a status of the social conscience of people, forged historically on the basis of proper cultural artifacts. In Russia education is mainly the process of human development and, like wherever, it is the institution of knowledge transmission. We show on the case of Russian history that the scientifically proven educational practice can contribute enriching development of social conscience after ideological and economic shocks.
    Date: 2008
  12. By: Black, Sandra E. (University of California, Los Angeles); Devereux, Paul (University College Dublin); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration)
    Abstract: Does it matter when a child starts school? While the popular press seems to suggest it does, there is limited evidence of a long-run effect of school starting age on student outcomes. This paper uses data on the population of Norway to examine the role of school starting age on longer-run outcomes such as IQ scores at age 18, educational attainment, teenage pregnancy, and earnings. Unlike much of the recent literature, we are able to separate school starting age from test age effects using scores from IQ tests taken outside of school, at the time of military enrolment, and measured when students are around age 18. Importantly, there is variation in the mapping between year and month of birth and the year the test is taken, allowing us to distinguish the effects of school starting age from pure age effects. We find evidence for a small positive effect of starting school younger on IQ scores measured at age 18. In contrast, we find evidence of much larger positive effects of age at test, and these results are very robust. We also find that starting school younger has a significant positive effect on the probability of teenage pregnancy, but has little effect on educational attainment of boys or girls. There appears to be a short-run positive effect on earnings of beginning school at a younger age; however, this effect has essentially disappeared by age 30. This pattern is consistent with the idea that starting school later reduces potential labor market experience at a given age for a given level of education; however, this becomes less important as individuals age.
    Keywords: education, earnings, IQ, teenage childbearing
    JEL: J1
    Date: 2008–04
  13. By: Osipian, Ararat
    Abstract: Corruption in higher education has long been neglected as an area of research in the US. The processes of decentralization, commoditization, and privatization in higher education rise questions of accountability, transparency, quality, and access. Every nation solves problems of access, quality, and equity differently. Thus, although prosecuting corruption in higher education is part of the legal process in every country, the ways in which legal actions are undertaken differ. This paper addresses the question: How is corruption in higher education understood and defined in legal cases, what particular cases receive more attention, and how these cases correlate with the major educational reforms, changes, and socio-economic context in the nation? Specifically, it analyses records of selected legal cases devoted to corruption in the US higher education. Decentralized financing of higher education anticipates cost sharing based in part on educational loans. The US higher education sector grows steadily, and so do opportunities for abuse, including in educational loans. The rapid expansion of education sector leaves some grey areas in legislation and raises issues of applicability of certain state and federal laws and provisions to different forms of misconduct, including consumer fraud, deception, bribery, embezzlement, etc. Higher Education Act, False Claims Act, and Consumer Protection Act cover corruption as related to the state and the public sector; corruption as related to client, business owner, and an agent; and corruption as related to consumer-business relations. However, the legal frame is simplistic, while the system of interrelations in the higher education industry is rather complex.
    Keywords: bribery; corruption; deception; fraud; higher education; law; loans; US
    JEL: I28 K42 I22
    Date: 2007–11–01
  14. By: Banerjee, Abhijit; Banerji, Rukmini; Duflo, Esther; Glennerster, Rachel; Khemani, Stuti
    Abstract: Participation of beneficiaries in the monitoring of public services is increasingly seen as a key to improving their efficiency. In India, the current government flagship program on universal primary education organizes both locally elected leaders and parents of children enrolled in public schools into committees and gives these groups powers over resource allocation, and monitoring and management of school performance. However, in a baseline survey we found that people were not aware of the existence of these committees and their potential for improving education. This paper evaluates three different interventions to encourage beneficiaries’ participation through these committees: providing information, training community members in a new testing tool, and training and organizing volunteers to hold remedial reading camps for illiterate children. We find that these interventions had no impact on community involvement in public schools, and no impact on teacher effort or learning outcomes in those schools. However, we do find that the intervention that trained volunteers to teach children to read had a large impact on activity outside public schools—local youths volunteered to be trained to teach, and children who attended these camps substantially improved their reading skills. These results suggest that citizens face substantial constraints in participating to improve the public education system, even when they care about education and are willing to do something to improve it.
    Keywords: community participation; development economics; educational economics
    JEL: I21 O12
    Date: 2008–04
  15. By: Budria, Santiago (University of Madeira); Pereira, Pedro T. (University of Madeira)
    Abstract: In this paper, we analyze the transition to the labour market of participants in vocational training in Madeira Island. In a first stage, we investigate how the employment status at different dates (one month, one year, and two years after the completion of the training program) depends on relevant variables, such as age, gender, education and the content and duration of the training. In a second stage, we use the individuals’ self-assessment regarding the effectiveness of the training program along three dimensions: employment, job-related skills and productivity. We find that respondents score training activities high in every dimension. Moreover, we find that training is more effective among the educated, indicating that vocational training is far from being remedial. We also find that long training programs and training in the area of tourism are particularly effective.
    Keywords: job-related skills, productivity, employment, training, ordered logit
    JEL: C35 I21 J64
    Date: 2008–04
  16. By: Aradhna Aggarwal (Indian Council for Research on International Economic Relations)
    Abstract: This study aims at examining the impact of Special Economic Zones (SEZs) on human development and poverty reduction in India. It identifies three channels through which SEZs address these issues: employment generation, skill formation (human capital development), and technology and knowledge upgradation. It examines how the impact of SEZs is passed through each of these channels. The study finds that the modality differs significantly according to the characteristics of the SEZs, in particular, the level of their development as reflected in the composition of economic activities. Within this framework, the study examines the sectoral and economic composition of SEZ activities in India. It finds that labour intensive, skill intensive and technology intensive firms co exist in India's zones and, therefore argues that all the three effects described above are likely to be important in the Indian context. Empirical findings reported in the study are based on the data collected from both secondary sources and primary surveys. The primary survey based data was generated through extensive interviews of entrepreneurs and workers across the three largest SEZs (in terms of their contribution to exports and employment) : SEEPZ, Madras and Noida. The analysis reveals that `employment generation' has been the most important channel through which SEZs lend themselves to human development concerns, in India. Employment generated by zones is remunerative. Wage rates are not lower than those prevailing outside the zones. Besides, working conditions, non monetary benefits (such as transport, health and food facilities), incentive packages and social security systems are better than those prevailing outside the zones, in particular, in the small/informal sector. The role of SEZs in human capital formation and technology upgradation is found to be rather limited. The study argues that the zones' potential could not be exploited fully in India. This could primarily be attributed to the limited success of SEZs in attracting investment and promoting exports. The new SEZ policy gives a major thrust to SEZs. However the creation of SEZs alone does not ensure the realization of their potential. The government will need to play a more proactive role for effective realization of the full range of benefits from SEZs.
    Keywords: Special Economic Zones, Human Development, Employment, Poverty, Skill Formation, Technology Transfers, Local R&D
    JEL: F16 J31 J32 O15 O32
    Date: 2007–05
  17. By: Alrubaie, Falah
    Abstract: Analysis of Human Development Indicators In Libya Alrubaie.Falah.K.Ali - Economics-faculty of Economics–derna-Omar Almukhtar university- Libya Summary This study aimed to diagnose the nature of the challenges facing human development in Libya in the future, in light of the trend towards privatization and economic reform and retreat of the role of the state and public sector, and the economic recession that dominated the Libyan economy since the mid-nineties yet, and how to maintain the gains made by, and address the shortage of quality aspects of the recipe given sustainability, after it became successful achievements in the areas of health and education are threatened with exposure to significant setback.The only way to meet those challenges is to intensify efforts to raise the level of the three dimensions of human development: the formation of human capacities, human use of this capacity, raising the level of human well-being and the granting of these indicators priority in the allocations of investment, and to keep raising the living standard of citizens while working to develop and improve constantly, and keenness to achieve justice in the distribution of incomes, and an evaluation and follow-up continuing to achieve human development consistent with the rates of international and national particularities and the advancement of the education sector in the context of economic restructuring to give priority to the aspects of quality and focus on the quality of education its various dimensions, and keep up with economic and social developments and changes and build modern health policy with the task of accurate diagnosis of the problems of the health sector, and the diagnosis of pros and cons current horizontal expansion in health services, policy and the reality of the pharmaceutical and medical supply and the proposed alternatives, and the reality of policy alternatives and spending in the health sector, and interest in the maintenance of the gains distributive and social justice in the provision of housing for all social groups, particularly those on low income, together with adherence to appropriate staffing resources, the need to develop a national strategy for the advancement of the status of women Jamahiriya, containing among other proposals, foremost of the establishment of social programmes to reduce the negative effects of economic restructuring programmes on the status of women, creation of a national fund for the advancement of women in order to improve their quality of life and ensure that aspects of the economic and social security through expansion of programmes investment loans and loan subsidies and housing programs marriage and custody and training programmes and rehabilitation
    Keywords: Analysis of Human Development Indicators In Libya
    JEL: O15
    Date: 2005–02–05
  18. By: Atila Abdulkadiroglu; Parag A Pathak; Alvin E Roth
    Date: 2008–04–18

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