nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒05‒31
ten papers chosen by
Fabio Sabatini
University of Siena

  1. The Impact of Continuous Training on a Firm’s Innovations By Stefan Bauernschuster; Oliver Falck; Stephan Heblich
  2. Past Experience, Cognitive Frames, and Entrepreneurship: Some Econometric Evidence from the Indian Pharmaceutical Industry By S. Bhaduri; H. Worch
  3. Explaining International Differences in Entrepreneurship: The Role of Individual Characteristics and Regulatory Constraints By Silvia Ardagna; Annamaria Lusardi
  4. Technological change and employer-provided training: Evidence from German establishments By Ardiana N. Gashi; Geoff Pugh; Nick Adnett
  5. "Trying" to be Entrepreneurial By Brannback, Malin; Krueger, Norris; Carsrud, Alan; Elfving, Jennie
  6. It takes three to tango in employment: Matching vocational education organisations, students and companies in labour market By Mika Maliranta; Satu Nurmi; Hanna Virtanen
  7. The Economic Returns to Field of Study and Competencies Among Higher Education Graduates in Ireland By Elish Kelly; Philip O'Connell; Emer Smyth
  8. Does Speed Signal Ability? The Impact of Grade Repetitions on Employment and Wages By Brodaty, Thomas; Gary-Bobo, Robert J.; Prieto, Ana
  9. The effect of quantitative and qualitative training on labour demand in Belgium: a monopolistic competition approach By Benoît Mahy; Mélanie Volral
  10. Improving Education Outcomes in Germany By David Carey

  1. By: Stefan Bauernschuster (University of Passau); Oliver Falck (Ifo Institute for Economic Research, University of Munich); Stephan Heblich (Max Planck Institute of Economics, Jena)
    Abstract: Keeping up with rapid technological change necessitates constant innovation. Successful innovation depends on both incumbent workers’ knowledge, based on experience, and knowledge about the latest technologies, along with the skills needed to implement them. Both of these knowledge-based elements of innovation can be attained through moderate labor force turnover in combination with continuous training. Based on German micro data, we find empirical evidence in support of training leading to innovation within a multivariate regression framework. However, when instrumenting training by the existence of a union’s contract or a works council this impact disappears.
    Keywords: Innovation, training, unions, works councils
    JEL: J24 L11 O31
    Date: 2008–03
  2. By: S. Bhaduri; H. Worch
    Abstract: The theoretical literature identifies three important entrepreneurial dimensions, namely discovering new opportunities, responsiveness to uncertainty, and coordination of a firm. In the empirical literature, past experience has been identified as having an important influence on organizational behavior. This literature, however, focuses predominantly on the impact of experience on new opportunities using a resource-based view and human capital perspective. In contrast, we draw upon the cognitive science literature to argue that past experience shapes an entrepreneur’s cognitive frame, and, hence, influences entrepreneurship in a more holistic manner. We provide econometric evidence of the impact of past experience on all three entrepreneurial dimensions from the small scale Indian pharmaceutical enterprises.
    Keywords: Entrepreneurship, Past experience, Cognition, Informatione and knowledge, India pharmaceutical industry Length 42 pages
    JEL: D83 L26 M10
    Date: 2008–05
  3. By: Silvia Ardagna; Annamaria Lusardi
    Abstract: We use a micro dataset that collects information across individuals, countries, and time to investigate the determinants of entrepreneurial activity in thirty-seven developed and developing nations. We focus both on individual characteristics and on countries' regulatory differences. We show that individual characteristics, such as gender, age, and status in the workforce are important determinants of entrepreneurship, and we also highlight the relevance of social networks, self-assessed skills, and attitudes toward risk. Moreover, we find that regulation plays a critical role, particularly for those individuals who become entrepreneurs to pursue a business opportunity. The individual characteristics that are impacted most by regulation are those measuring working status, social network, business skills, and attitudes toward risk
    JEL: M13
    Date: 2008–05
  4. By: Ardiana N. Gashi (Riinvest University and Riinvest Institute, Prishtina, Kosova); Geoff Pugh (Staffordshire University Business School, Stoke-on-Trent, UK); Nick Adnett (Staffordshire University Business School, Stoke-on-Trent, UK)
    Abstract: There is a wide range of theoretical and empirical analyses suggesting that technological change has increased the demand for skills. Since training is a mechanism to upgrade workers’ skills, it would be expected that technical progress strengthens the importance of training on account of the requirement for skills to complement new technology. However, the relationship between technical progress and firms’ (employer-funded) continuous training has been little investigated. In our research we address the theoretical gap by building upon existing models from the skillbiased technological change and training literatures. This theoretical platform supports a maintained hypothesis of a positive relationship between training and technological change, which we investigate empirically for Germany using data from the IAB establishment panel. Our empirical findings indicate that in Germany a greater share of workers undergo further/continuing training in establishments subject to technological change. An important issue we raise in our empirical analysis is the possibility of endogeneity/simultaneity between training and technological change.
    Keywords: further training, technological change, skills
    Date: 2008–05
  5. By: Brannback, Malin; Krueger, Norris; Carsrud, Alan; Elfving, Jennie
    Abstract: If we are to understand how entrepreneurial intentions evolve, we must embrace theories reflecting the inherent dynamics of human decision making. While the dominant model of entrepreneurial intentions remains invaluable, capturing the dynamics is necessary to advance our understanding of how intent becomes action. To this end, we offer Bagozzi’s Theory of Trying (TT) as a theory-driven model that assumes a dynamic pathway to intent. Rather than focusing on intentions toward a static target behavior, TT focuses on intentions toward a dynamic goal. To support this perspective, we offer striking new evidence that the emergent intentions process is indeed dynamic.
    Keywords: intentions; theory of trying; tipping points; reciprocal causation; entrepreneurship; entrepreneurial cognition
    JEL: M13
    Date: 2007–06
  6. By: Mika Maliranta (The Research Institute of the Finnish Economy (ETLA)); Satu Nurmi (Statistics Finland); Hanna Virtanen (The Research Institute of the Finnish Economy (ETLA))
    Abstract: We examine the determinants of labour market status after the initial vocational basic education (ISCED 3) by use of unique linked register data on students, their parents, teachers, educational organisations and business companies in Finland. We distinguish between four outcomes: 1) employment 2) further studies 3) non-employment and 4) drop-out. The explanatory factors are classified into three main groups: the characteristics of 1) the educational organisation and their institutions, 2) the students and 3) the local business conditions. Teaching expenditures do not matter but teachers’ skills do. Parental background plays a central role. Local business development matters for boys.
    Keywords: Education production, vocational education, employability, further studies, regional development, drop-out
    JEL: H52 I21 J23 J24
    Date: 2008–05
  7. By: Elish Kelly (Economic and Social Research Institute (ESRI)); Philip O'Connell (Economic and Social Research Institute (ESRI)); Emer Smyth (Economic and Social Research Institute (ESRI))
    Abstract: This paper looks at the economic returns to different fields of study in Ireland in 2004 and also the value placed on various job-related competencies, accumulated on completion of higher education, in the Irish labour market. In examining these issues the paper seeks to control for potential selection influences by ensuring through quantile regression that comparisons are made within sections of the wage distribution where ability differences are likely to be minimal. The impact that education-job mismatch, both education-level and field, has on earnings is also taken into consideration. The results derived indicate that, relative to the base case, there are higher returns to Medicine & Veterinary, Education, Engineering & Architecture, Science and Computers & IT. The quantile regression analysis reveals that the OLS estimates are not particularly affected by unobserved heterogeneity bias. Furthermore, this approach indicates that field specific returns diminish the more able the graduate. Small but significant returns were found for some of the competencies analysed, in particular technical skills.
    Keywords: Field of Study, Competencies, Returns to Education, Quantile Regression, Ireland
    JEL: I20 J24 J30 J31
    Date: 2008–05
  8. By: Brodaty, Thomas; Gary-Bobo, Robert J.; Prieto, Ana
    Abstract: We propose a new test for the presence of job-market signalling in the sense of Spence (1973), based on an equation in which log-wages are explained by two endogenous variables: the student's degree and the student's time to degree, not simply by years of education. Log-wages are regressed on a measure of education, which is a position on a scale of certificates and degrees, and a measure of the student delay, defined as the difference between the individual's school-leaving age and the average school-leaving age of students holding the same certificate or degree. We use past school-opening instruments, and distance-to-the-nearest-college, also measured in the past, when students were entering grade 6, to identify the parameters. We find a robust, significant and negative impact of the delay variable on wages, averaged over the first five years of career. A year of delay causes a 9% decrease of the student's wage. The only reasonable explanation for this effect is the fact that longer delays signal unobserved characteristics with a negative productivity value. We finally estimate a nonlinear model of education choices and cannot reject the assumption that the data is generated by a job-market signalling equilibrium.
    Keywords: grade repetitions; Returns to education; Signalling; time to degree; wages
    JEL: I2 J3
    Date: 2008–05
  9. By: Benoît Mahy (Centre de Recherche Warocqué, Université de Mons-Hainaut, Belgium); Mélanie Volral (Centre de Recherche Warocqué, Université de Mons-Hainaut, Belgium)
    Abstract: The objective of this paper is to model and estimate the impact of labour training financed by the firm on labour demand in Belgium, introducing training potential productivity and cost effects. To model this influence, we assume profit maximizing firms producing under a short run monopolistic competition regime. We emphasize that training variables, both qualitative and quantitative, can either increase labour demand through their positive effect on labour physical productivity net from the dropping price required to sell additional production, and that they can decrease labour demand through induced increasing direct labour costs and wages. GMM estimations on a panel of 269 firms observed during the period 1998-2004 show non significant impacts of training variables on labour demand, the productivity and cost effects seeming to offset each other. These results allow us to suggest two scenarios in terms of firms and workers behaviour and that subsidiary training could favour employment under the two assumptions that firms don’t transform training in an increased productivity – wage mark-up, but convert additional productivity in employment, and workers don’t claim for higher wages as a result of additional productivity.
    Keywords: Training, Labour Demand,Human capital, Labour Productivity, Panel Data
    JEL: C23 J23 J24 M53
    Date: 2008–05
  10. By: David Carey
    Abstract: Improving education outcomes is important for Germany’s long-term economic performance and social cohesion. While student achievement is above the OECD average in science and at the OECD average in reading and mathematics according to the 2006 OECD PISA study, weaker students tend to do badly by international comparison and socio-economic and/or immigrant backgrounds have a large impact. Another problem is that the proportion of younger people that completes tertiary education is relatively low. The authorities are undertaking wide ranging reforms touching all levels of education to tackle these problems. Nevertheless, there is scope to go further by: increasing participation in early childhood education and care of children from less advantaged socio-economic backgrounds and improving the quality of such education; improving teaching quality; reducing stratification in the school system; and making tertiary education more attractive and responsive to labour-market requirements. With the reforms underway or suggested, Germany would be able to look forward to higher education achievement and attainment and, especially, greater equality of education opportunity. <P>Améliorer les résultants de l’enseignement en Allemagne <BR>Il importe d’améliorer les résultats de l’enseignement pour les performances économiques à long terme et pour la cohésion sociale de l’Allemagne. Si les élèves réussissent mieux que la moyenne de l’OCDE en sciences et atteignent la moyenne en compréhension de l’écrit et en mathématiques selon l’enquête PISA 2006 de l’OCDE, les élèves en difficulté ont généralement des résultats faibles par rapport à ceux des autres pays et l’influence du milieu socio-économique et/ou de l’origine est forte. Autre problème : la proportion des jeunes qui achèvent leurs études supérieures est relativement faible. Les autorités ont entrepris une vaste réforme de l’ensemble du système éducatif afin de résoudre ces difficultés. Néanmoins, il est possible d’aller plus loin, notamment en augmentant le nombre d’enfants de familles défavorisées inscrits dans les services d’éducation et d’accueil des jeunes enfants et en améliorant la qualité de ces services, en rehaussant la qualité de l’enseignement, en réduisant la stratification du système scolaire, et en rendant l’enseignement supérieur plus avantageux et plus réactif face aux exigences du marché du travail. Avec les réformes en cours ou proposées, l’Allemagne pourrait espérer des résultats scolaires et des niveaux de formation plus élevés et surtout, une plus grande égalité des chances dans le domaine de l’éducation.
    Keywords: education, éducation, PISA, achievement, attainment, school system, stratification, PISA, réussite scolaire, stratification, accountability, responsabilité, cadre socio–économique
    JEL: I21 I28 J24
    Date: 2008–05–15

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