nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒06‒21
nineteen papers chosen by
Fabio Sabatini
University of Siena

  1. Heterogeneous Agents, Human Capital Formation and International Income Inequality By Haris Munandar
  2. The Impact of Entrepreneurship Education on Entrepreneurship Competencies and Intentions By Hessel Oosterbeek; Mirjam C. van Praag; Auke IJsselstein
  3. Building institutions for growth and human development: an economic perspective applied to the transitional countries of Europe and CIS By Zeghni, Sylvain; Fabry, Nathalie
  4. Entrepreneurship Education and Training in a Small Business Context: Insights from the Competence-based Approach By Lans, T.; Hulsink, W.; Baert, H.; Mulder, H.M.
  5. Conspicuous Consumption, Human Capital and Poverty By Moav, Omer; Neeman, Zvika
  6. Overqualification, Job Dissatisfaction, and Increasing Dispersion in the Returns to Graduate Education By Francis Green; Yu Zhu
  7. An Economic Analysis of Identity and Career Choice By Maria Knoth Humlum; Kristin J. Kleinjans; Helena Skyt Nielsen
  8. Remittances, liquidity constraints and human capital investments in Ecuador. By C. Calero; Arjun S. Bedi; R. Sparrow
  9. On the optimal allocation of students when peer effect works: Tracking vs Mixing By Marisa Hidalgo-Hidalgo
  10. The Health Returns to Education - What Can We Learn from Twins? By Petter Lundborg
  11. Armed Conflict and Schooling: Evidence from the 1994 Rwandan Genocide By Richard Akresh; Damien de Walque
  12. Adult education in the European Union - with a focus on Hungary By Szilvia Hamori
  13. What is it About Schooling That the Labor Market Rewards? The Components of the Return to Schooling By Cyril Pasche
  14. Educational inequality and educational poverty. The chinese case in the period 1975-2004 By Saccone Donatella
  15. The Incidence and Intensity of Formal Lifelong Learning By Marianne Simonsen; Lars Skipper
  16. Entrepreneurial Exit in Real and Imagined Markets By Erik Stam; Roy Thurik; Peter van der Zwan
  17. The Effect of Parents' Schooling on Child's Schooling: A Nonparametric Bounds Analysis By Monique de Haan
  18. Why Educated Mothers don’t Make Educated Children? A Statistical Study in the Intergenerational Transmission of Schooling By Chiara Pronzato
  19. The Effect of Marriage on Education of Immigrants: Evidence from a Policy Reform Restricting Spouse Import By Helena Skyt Nielsen; Nina Smith; Aycan Celikaksoy

  1. By: Haris Munandar (Bureau of Economic Research, Bank of Indonesia, Jakarta)
    Abstract: The paper examines the effect of heterogeneity in individual human capital formation on cross-country income inequality. It considers a two-country model of overlapping generation heterogeneous economies with the following features: (1) individuals are heterogeneous with respect to inborn ability and parental human capital; (2) intergenerational transfers take place via public investment in education financed by tax, and parental education; (3) due to variation in individual human capital, we have endogenous heterogeneity both in labor supply and in parents’ participation in self-educating their offspring. Besides exploring cross-country variation in public education, how its low level can lead to a poverty trap and how its high level can result in an increasing society’s effective human capital, we study the effects of capital markets integration, in equilibrium, on the intra-generational income inequality in both the investing and receiving countries.
    Keywords: Heterogenous Agents; Human Capital; Poverty Efrap; Income Inequality
    JEL: D91 E25 H52
    Date: 2008–02–01
  2. By: Hessel Oosterbeek (University of Amsterdam); Mirjam C. van Praag (University of Amsterdam); Auke IJsselstein (University of Amsterdam)
    Abstract: This paper analyzes the impact of a leading entrepreneurship education program on college students’ entrepreneurship competencies and intentions using an instrumental variables approach in a difference-in-differences framework. We exploit that the program was offered to students at one location of a school but not at another location of the same school. Location choice (and thereby treatment) is instrumented by the relative distance of locations to parents’ place of residence. The results show that the program does not have the intended effects: the effect on students’ self-assessed entrepreneurial skills is insignificant and the effect on the intention to become an entrepreneur is even significantly negative.
    Keywords: Entrepreneurship education; program evaluation; entrepreneur competencies; entrepreneur intentions
    JEL: A20 C31 H43 H75 I20 J24 L26
    Date: 2008–04–08
  3. By: Zeghni, Sylvain; Fabry, Nathalie
    Abstract: The aim of this paper is to analyse in a more qualitative way the role of institutions in transitional countries in the CEECs and CIS. The main question we address is: what kind of institutional arrangement leads to Human development? We propose an analytical pattern where global performance (i.e. Human development) is the final outcome of a new institutional arrangement.
    Keywords: Institution; Transition; Human Development; Growth
    JEL: P30 O17 P27
    Date: 2008–05
  4. By: Lans, T.; Hulsink, W.; Baert, H.; Mulder, H.M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The concept of competence, as it is brought into play in current research, is a potentially powerful construct for entrepreneurship education research and practice. Although the concept has been the subject of strong debate in educational research in general, critical analysis of how it has been used, applied and experienced in entrepreneurship education practice is scarce. This article contributes specifically to the discussion of entrepreneurial competence by theoretically unfolding and discussing the concept. Subsequently, the implications of applying a competence-based approach in entrepreneurship education are illustrated and discussed based on analysis of two cases that were aimed at identifying, diagnosing and eventually developing entrepreneurial competence in small businesses in the Netherlands and Flanders (Belgium). The cases show that the added value of focussing on competence in entrepreneurship education lies in making the (potential) small business owner aware of the importance of certain entrepreneurial competencies and in providing direction for competence development. In this process it is fundamental that competence is treated as an item for discussion and interpretation, rather than as a fixed template of boxes to be ticked. Furthermore the cases highlight that a competence-based approach does not determine the type of educational and instructional strategies to be used. Its consequential power in that respect is limited.
    Keywords: entrepreneurship;education;competence-based training;small business;entrepreneurial learning;competence
    Date: 2008–05–22
  5. By: Moav, Omer; Neeman, Zvika
    Abstract: Poor families around the world spend a large fraction of their income on consumption of goods that appear to be useless in alleviating poverty, while saving at very low rates and neglecting investment in health and education. Such consumption patterns seem to be related to the persistence of poverty. We offer an explanation for this observation, based on a trade-off between conspicuous consumption and human capital as signals for unobserved income, under the assumption that individuals care about their status. Despite homothetic preferences, this trade-off gives rise to a convex saving function, which can help explain the persistence of poverty.
    Keywords: Conspicuous Consumption; Human Capital; Poverty
    JEL: D91 O11 O12 O15
    Date: 2008–06
  6. By: Francis Green; Yu Zhu
    Abstract: Increasing dispersion in the returns to graduate education is found, using quantile regression. This trend is related to rising overqualification. We distinguish between and validate measures of Real and Formal overqualification, according to whether it is or is not accompanied by underutilisation of skill; and using a unique data series in Britain we report the trend in overqualification types between 1992 and 2006. The distinction between types is relevant because employees in the Real Overqualification group experience greater, and more sharply rising, pay penalties than those in the Formal Overqualification group. Real Overqualification, but not Formal Overqualification, is associated with job dissatisfaction. Formal Overqualification has been increasing over time, and in 2006 characterised nearly one in four graduates. Real Overqualification has been steady or rising only slowly; in 2006 it affected less than one in ten graduates. Conditioning on graduates being matched to graduate jobs, it is found that there is no significant increase in the dispersion of returns to graduate education. The normative implication drawn is that the state should provide regular public information on the distribution of the returns to graduate education.
    Keywords: pay; job satisfaction; job dissatisfaction; overeducation; overqualification; skill utilisation; returns to college education; returns to graduate education
    JEL: I20 J24 J28
    Date: 2008–02
  7. By: Maria Knoth Humlum; Kristin J. Kleinjans; Helena Skyt Nielsen (School of Economics and Management, University of Aarhus, Denmark)
    Abstract: Standard economic models which focus on pecuniary payo¤s cannot explain why there are highly able individuals who choose careers with low pecuniary re- turns. Therefore, financial incentives are unlikely to be effective in influencing career choices of these individuals. Based on Akerlof and Kranton (2000), we con- sider a model of career choice and identity where individuals derive non-pecuniary identity payoffs. Using factor analysis on a range of attitude questions, we find two factors related to identity (career orientation and social orientation), which are important for educational choices. The implication is that policymakers and institutions of higher education need to focus on identity related issues rather than just improved financial incentives if they aim at attracting the high ability youth to occupations with excess demand for labor.
    Keywords: career choice, choice of higher education, identity,self-image
    JEL: I21
    Date: 2007–10–12
  8. By: C. Calero; Arjun S. Bedi; R. Sparrow
    Abstract: Over the last decade Ecuador has experienced a strong increase in financial transfers from migrated workers. This paper investigates how remittances via trans-national networks affect human capital investments through relaxing resource constraints and facilitate households in consumption smoothing by reducing vulnerability to economic shocks. Our results show that remittances increase school enrolment and decrease incidence of child work, especially for girls and in rural areas. Furthermore, we find that aggregate shocks are associated with increased work activities, while remittances are used to finance education when households are faced with these shocks.
    Keywords: migration, remittances, transnational networks, human capital, Latin America, Ecuador.
    JEL: I20 J22 O15
    Date: 2008
  9. By: Marisa Hidalgo-Hidalgo
    Abstract: The belief that both the behavior and outcomes of students are affected by their peers is important in shaping education policy. I analyze two polar education systems -tracking and mixing- and propose several criteria for their comparison. I find that tracking is the system that maximizes average human capital in societies where the distribution of pre-school achievement is not very dispersed. I also find that when peer effects and individuals’ pre-school achievement are close substitutes, all risk averse individuals prefer mixing.
    Keywords: Human Capital; Efficiency; Peer Effects; Tracking, Mixing
    JEL: D63 I28 J24
    Date: 2008–06
  10. By: Petter Lundborg (Free University Amsterdam)
    Abstract: This paper estimates the health returns to education, using data on identical twins. I adopt a twin-differences strategy in order to obtain estimates that are not biased by unobserved family background and genetic traits that may affect both education and health. I further investigate to what extent within-twin-pair differences in schooling correlates with within-twin-pair differences in early life health and parent-child relations. The results suggest a causal effect of education on health. Higher educational levels are found to be positively related to self-reported health but negatively related to the number of chronic conditions. Lifestyle factors, such as smoking and overweight, are found to contribute little to the education/health gradient. I am also able to rule out occupational hazards and health insurance coverage as explanations for the gradient. In addition, I find no evidence of heterogenous effects of education by parental education. Finally! , the results suggest that factors that may vary within twin pairs, such as birth weight, early life health, parental treatment and relation with parents, do not predict within-twin pair differences in schooling, lending additional credibility to my estimates and to the general vailidy of using a twin-differences design to study the returns to education.
    Keywords: health production; education; schooling; twins; siblings; returns to education; ability bias
    JEL: I12 I11 J14 J12 C41
    Date: 2008
  11. By: Richard Akresh (University of Illinois at Urbana Champaign); Damien de Walque (World Bank)
    Abstract: To examine the impact of Rwanda’s 1994 genocide on children’s schooling, the authors combine two cross-sectional household surveys collected before and after the genocide. The identification strategy uses pre-war data to control for an age group’s baseline schooling and exploits variation across provinces in the intensity of killings and which children’s cohorts were school-aged when exposed to the war. The findings show a strong negative impact of the genocide on schooling, with exposed children completing one-half year less education representing an 18.3 percent decline. The effect is robust to including control variables, alternative sources for genocide intensity, and an instrumental variables strategy.
    Keywords: War, Human capital investment, Education, Genocide, Africa
    JEL: I20 J13 O12 O15
    Date: 2008–04
  12. By: Szilvia Hamori (Institute of Economics, Hungarian Academy of Sciences)
    Abstract: This paper examines adult education in Hungary for the years 1999, 2001 and 2003 along three dimensions: (a) the fraction of individuals participating in adult education, (b) their demographic and socio-economic characteristics and (c) the probability of participating in adult education / adult education lasting less than one year in the framework of a logit model. In a second step the paper focuses on a cross-country comparison of the three areas described above based on the European Union Labour Force Survey (EU LFS). The international comparison covers nine EU Member States, namely, Belgium, Denmark, Estonia, Finland, Greece, Italy, Lithuania, Poland and Sweden.
    Keywords: Analysis of education, adult education, logit model
    JEL: I21 C35
    Date: 2008–05
  13. By: Cyril Pasche (Department of Economics and “Leading House on the Economics of Education”, University of Geneva)
    Abstract: Research on determining what it is about schooling that the labor market rewards is scarce. This paper shows that when speci…cally controlling for schooling cognitive skills (i.e. the capacity to process information and apply knowledge) and not cognitive skills as a whole, a considerable share of the return to schooling is constituted of cognitive skills. This contrasts with previous research that strongly favored noncognitive skills (i.e. behavioral and personality traits) as the key component of the return to schooling. Results show schools are a place where one acquires, or is sorted, on a knowledge and a behavioral criteria in similar shares. Findings also suggest that cognitive skills acquired in school are considerably more likely to be rewarded than their non-schooling counterpart. This e¤ect may be attributed to the signaling value of schooling. Such conclusions give weight to current policies that employ cognitive skill tests to asses schooling quality.
    Keywords: Schooling, Cognitive and noncognitive skills, Wages, Rate of return, Omitted variable bias, Signaling
    JEL: I21 J24 J31
    Date: 2008–06
  14. By: Saccone Donatella (University of Turin)
    Date: 2008–05
  15. By: Marianne Simonsen; Lars Skipper (School of Economics and Management, University of Aarhus, Denmark)
    Abstract: We exploit a rich high quality register-based employer-employee panel data set to investigate the incidence and intensity of government co-sponsored training for the Danish adult population. We focus specifically on training over the working life cycle and find that the levels of participation vary across genders. We consider both the incidence (take-up in a given year) and intensity (hours conditional on enrolment) of training. We find evidence of considerable lifelong learning with regards to enrolment in basic and vocational training regardless of gender, whereas post-secondary training enrolment usually takes place early in life with a smooth decline over the working life cycle. Once the enrolment decision is made, however, and once a comprehensive conditioning set is included there are no striking differences in hours in training with regards to gender. Neither hours in vocational nor hours in post-secondary training are strongly age dependent. Hours in basic training do decrease significantly with age but the effects are very small.
    Keywords: lifelong learning, training, participation process
    JEL: I2 J24
    Date: 2008–06–09
  16. By: Erik Stam (University of Cambridge); Roy Thurik (Erasmus University Rotterdam); Peter van der Zwan (Erasmus University Rotterdam)
    Abstract: Entrepreneurs exit their business due to selection mechanisms experienced in the market place. Next to this well known ex-post decision to exit, entrepreneurs select ex-ante whether they are willing to pursue an entrepreneurial career at all, or to give up these entrepreneurial intentions. This paper compares the role of personal and ecological factors as determinants of these two types of selection: exit in real and in imagined markets. Entrepreneurs in imagined markets are more likely to exit in strong welfare state regimes, while real entrepreneurs are more likely to exit when they have low levels of human capital and when they are located in metropolitan areas.
    Keywords: entrepreneurship; nascent entrepreneurs; entrepreneurial exit; market selection
    JEL: J23 L26
    Date: 2008–03–27
  17. By: Monique de Haan (University of Amsterdam)
    Abstract: This paper uses a relatively new approach to investigate the effect of parents' schooling on child's schooling; a nonparametric bounds analysis based on Manski and Pepper (2000), using the most recent version of the Wisconsin Longitudinal Study. We start with making no assumptions and then add some relatively weak and testable assumptions to tighten the bounds. Although the bounds on the treatment effects include a zero effect, the upper bounds are informative especially for the effect of increasing parents' schooling from a high school degree to a bachelor's degree. Both for the effect of mother's schooling as for the effect of father's schooling the nonparametric upper bounds are significantly lower than the OLS results.
    Keywords: Intergenerational mobility; nonparametric bounds analysis; education
    JEL: I2 J62 C14
    Date: 2008–06–17
  18. By: Chiara Pronzato
    Abstract: More educated parents are observed to have better educated children. From a policy point of view, however, it is important to distinguish between causation and simple selection. Researchers trying to control for unobserved ability have found conflicting results: in most cases, they have found a strong positive paternal effect but a negligible maternal effect. In this paper, I evaluate the impact on the robustness of the estimates of the characteristics of the samples commonly used in this strand of research: samples of small size, with low variability in parental education, not randomly selected from the population.
    Keywords: intergenerational transmission, education, twin-estimator, sibling-estimator, power of the test
    JEL: I2
    Date: 2008–03
  19. By: Helena Skyt Nielsen; Nina Smith; Aycan Celikaksoy (School of Economics and Management, University of Aarhus, Denmark)
    Abstract: We investigate the effect of immigrants’ marriage behavior on dropout from education. To identify the causal effect, we exploit a recent Danish policy reform which generated exogenous variation in marriage behavior by a complete abolishment of spouse import for immigrants below 24 years of age. We find that the abrupt change of marriage behavior following the reform is associated with improved educational attainment of young immigrants. The causal impact of marriage on dropout for males is estimated to be around 20 percentage points, whereas the effect for females is small and mostly insignificant. We interpret the results as being consistent with a scenario where family investment motives drive the behavior of males, while the association between marriage and dropout for females is driven by selection effects. The estimated causal effect varies considerably across subgroups.
    Keywords: Education, dropout, immigrants, spouse import, marriage migration, family investment model
    JEL: I21 J12
    Date: 2007–06–29

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