nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒07‒14
eleven papers chosen by
Fabio Sabatini
University of Siena

  1. Human Capital, Economic Growth, and Regional Inequality in China By Fleisher, Belton M.; Li, Haizheng; Zhao, Min Qiang
  2. Education and Crime over the Life Cycle By Giulio Fella; Giovanni Gallipoli
  3. Skill gaps in the EU: role for education and training policies By Bert Minne; Marc van der Steeg; Dinand Webbink
  4. General Education vs. Vocational Training: Evidence from an Economy in Transition By Ofer Malamud; Cristian Pop-Eleches
  5. Human Capital Policies in a Static, Two-Sector Economy with Imperfect Markets By Concetta Mendolicchio; Dimitri Paolini; Tito Pietra
  6. Training Background and Early Retirement By Montizaan, Raymond; Cörvers, Frank; de Grip, Andries
  7. Schools, Skills, and Synapses By Heckman, James J.
  8. Armed Conflict and Schooling: Evidence from the 1994 Rwandan Genocide By Akresh, Richard; de Walque, Damien
  9. Self-Selection into Teaching: The Role of Teacher Education Institutions By Denzler, Stefan; Wolter, Stefan
  10. The Role of Educational Choice in Occupational Gender Segregation: Evidence from Trinidad and Tobago By Sookram, Sandra; Strobl, Eric
  11. Migration, the Quality of the Labour Force and Economic Inequality By Kahanec, Martin; Zimmermann, Klaus F

  1. By: Fleisher, Belton M. (Ohio State University); Li, Haizheng (Georgia Tech); Zhao, Min Qiang (Ohio State University)
    Abstract: We study the dispersion in rates of provincial economic- and TFP growth in China. Our results show that regional growth patterns can be understood as a function of several interrelated factors, which include investment in physical capital, human capital, and infrastructure capital; the infusion of new technology and its regional spread; and market reforms, with a major step forward occurring following Deng Xiaoping’s “South Trip” in 1992. We find that FDI had much larger effect on TFP growth before 1994 than after, and we attribute this to emergence of other channels of technology transfer when marketization accelerated. We find that human capital positively affects output per worker and productivity growth. In particular, in terms of its direct contribution to production, educated labor has a much higher marginal product. Moreover, we estimate a positive, direct effect of human capital on TFP growth. This direct effect is hypothesized to come from domestic innovation activities. The estimated spillover effect of human capital on TFP growth is positive and statistically significant, which is very robust to model specifications and estimation methods. The spillover effect appears to be much stronger before 1994. We conduct cost-benefit analysis and a policy “experiment,” in which we project the impact of increases in human capital and infrastructure capital on regional inequality. We conclude that investing in human capital will be an effective policy to reduce regional gaps in China as well as an efficient means to promote economic growth.
    Keywords: China, TFP growth, economic growth, human capital, infrastructure
    JEL: O15 O18 O47 O53
    Date: 2008–07
  2. By: Giulio Fella (Queen Mary, University of London); Giovanni Gallipoli (University of British Columbia)
    Abstract: In this paper we ask whether policies targeting a reduction in crime rates through changes in education outcomes can be considered an effective and cost-viable alternative to interventions based on harsher punishment alone. In particular we study the effect of subsidizing high school completion. Most econometric studies of the impact of crime policies ignore equilibrium effects and are often reduced-form. This paper provides a framework within which to study the equilibrium impact of alternative policies. We develop an overlapping generation, life-cycle model with endogenous education and crime choices. Education and crime depend on different dimensions of heterogeneity, which takes the form of differences in innate ability and wealth at birth as well as employment shocks. PSID, NIPA and CPS data are used to estimate the parameters of a production function with different types of human capital and to approximate a distribution of permanent heterogeneity. These estimates are used to pin down some of the model's parameters. The model is calibrated to match education enrolments, aggregate (property) crime rate and some features of the wealth distribution. In our numerical experiments we find that policies targeting crime reduction through increases in high school graduation rates are more cost-effective than simple incapacitation policies. Furthermore, the cost-effectiveness of high school subsidies increases significantly if they are targeted at the wealth poor. We also find that financial incentives to high school graduation have radically different implications in general and partial equilibrium (i.e. the scale of the programmes can substantially change its outcomes).
    Keywords: Crime, Education, Subsidies
    JEL: H52
    Date: 2008–07
  3. By: Bert Minne; Marc van der Steeg; Dinand Webbink
    Abstract: Skill gaps are widely seen as a problem that lowers aggregate productivity growth. A question for the European Commission is whether and how governments should take action with education and training policies to reduce skill gaps and make Europe the best performing region in the world. European citizens can best decide for themselves on the type of education. Distribution of information on occupation prospects is effective to influence their choice of education. Moreover, it is important that the education system is sufficiently flexible to absorb unexpected shocks in skill needs of employees. Policies stimulating education targeted at government-assigned sectors are risky policies. Intensification of general education at the cost of specific education, and intensification of training of employees find little support.
    Keywords: Skill gaps; education and training policy; market failures
    JEL: I28 J24
    Date: 2008–04
  4. By: Ofer Malamud; Cristian Pop-Eleches
    Abstract: This paper examines the relative benefits of general education and vocational training in Romania, a country which experienced major technological and institutional change during its transition from Communism to a market economy. To avoid the bias caused by non-random selection, we exploit a 1973 educational reform that shifted a large proportion of students from vocational training to general education while keeping average years of schooling unchanged. Using data from the 1992 and 2002 Romanian Censuses and household surveys from 1995-2000, we analyze the effect of this policy with a regression discontinuity design. We find that men in cohorts affected by the policy were significantly less likely to work in manual or craft-related occupations than their counterparts who were unaffected by the policy. However, in contrast to cross-sectional findings, we find no difference in labor market participation or earnings between cohorts affected and unaffected by the policy. We therefore conclude that differences in labor market returns between graduates of vocational and general schools are largely driven by selection.
    JEL: I21 J24 P20
    Date: 2008–07
  5. By: Concetta Mendolicchio; Dimitri Paolini; Tito Pietra
    Abstract: The paper studies a two-sector economy with investments in human and physical capital and imperfect labor markets. Workers and firms endogenously select (paying a fixed cost) the sector they are active in, and choose the amount of their investments. The economy is characterized by pecuniary externalities. Given the partition of the agents among the two sectors, at equilibrium there is underinvestment in both human and physical capital, as in Acemoglu (1996). A second externality is induced by the self-selection of the agents in the two sectors. When the difference between total factor productivities (TFP) is sufficiently large, subsidies to investments in education in the low TFP sector and fixed taxes increasing the cost to access the high productivity sector increase expected total surplus, while subsidies to investments in the high TFP sector can actually reduce it. To the contrary, subsidies to the amount of investments in human capital in the high TFP sector may have a positive effect on social welfare when the TFPs are sufficiently close.
    Keywords: Human capital; Efficiency; Human capital policies
    JEL: J24 H2
    Date: 2008
  6. By: Montizaan, Raymond (ROA, Maastricht University); Cörvers, Frank (ROA, Maastricht University); de Grip, Andries (ROA, Maastricht University)
    Abstract: Several studies show that employees with firm-specific skills are more likely to be covered by employer-sponsored pension schemes than workers with general skills. Therefore it can be expected that workers with firm-specific skills retire earlier. This paper tests this prediction using US data from the National Longitudinal Survey of Older Men. We find that workers who participated in firm-specific training in their early careers retire earlier than workers with a general training background. This indicates that shared investments in firm-specific training are embedded in implicit contracts that induce early retirement. The results remain robust when controlling for technological change and work commitment.
    Keywords: retirement, training, deferred compensation
    JEL: J14 J26 J31
    Date: 2008–05
  7. By: Heckman, James J. (University of Chicago)
    Abstract: This paper discusses (a) the role of cognitive and noncognitive ability in shaping adult outcomes, (b) the early emergence of differentials in abilities between children of advantaged families and children of disadvantaged families, (c) the role of families in creating these abilities, (d) adverse trends in American families, and (e) the effectiveness of early interventions in offsetting these trends. Practical issues in the design and implementation of early childhood programs are discussed.
    Keywords: productivity, high school dropout, ability gaps, family influence, noncognitive skills, early interventions
    JEL: A12
    Date: 2008–05
  8. By: Akresh, Richard (University of Illinois at Urbana-Champaign); de Walque, Damien (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: civil war, human capital investment, education, genocide, Africa
    JEL: I20 J13 O12 O15
    Date: 2008–05
  9. By: Denzler, Stefan (Swiss Co-ordination Center for Research in Education); Wolter, Stefan (Swiss Co-ordination Center for Research in Education)
    Abstract: Good teachers are critical for a high-quality educational system. This in turns leads to the question of who is interested in going into the teaching profession. Although research has been done on the professional careers of teachers, the issue of self-selection into teacher education has been mostly overlooked until now. The analyses contained in our study are based on a representative sampling of over 1500 high-school students in Switzerland shortly before graduation. The findings indicate that there is a self-selection process with regard to courses of study at teaching training institutions, which is reinforced by institutional and structural characteristics of the types of higher education institutions and the courses of study they offer. This can clearly be seen in comparison with high-school students preparing to study at another type of higher educational institution (university). Accordingly, the findings of this paper tend to indicate that the choices made by future teachers depend to a large extent also on where and how teachers are trained.
    Keywords: teacher education, teacher training, teacher education colleges, self-selection, v
    JEL: I2 I28 J24
    Date: 2008–05
  10. By: Sookram, Sandra (University of the West Indies, SALISES); Strobl, Eric (Ecole Polytechnique, Paris)
    Abstract: We analyse the role of educational choice on the degree of occupational segregation in Trinidad and Tobago during a period in which educational policies intent on equating gender opportunities in education were implemented. To this end we utilise waves of the Trinidad and Tobago labour force survey over the period 1991-2004. Our results show that while educational segregation has fallen substantially over our sample period, this has not translated into less occupational segregation. This suggests that the educational policy has not been sufficient to combat occupational segregation. However, results at a more disaggregated level show that experiences have been heterogeneous across educational and occupational groups.
    Keywords: educational choice, occupational segregation, gender
    JEL: I21 J16 J24
    Date: 2008–06
  11. By: Kahanec, Martin; Zimmermann, Klaus F
    Abstract: Mobility of workers involves flows of labour, human capital and other production factors and thus contributes to a more efficient allocation of resources. Besides these effects on allocative efficiency, migrant flows affect relative wages and also change the international and national distribution of skills and thereby equality in the receiving society. This paper suggests that skilled immigration promotes economic equality in advanced economies under standard conditions. The context is theoretically explained in a core model and empirically documented using unique data from the WIID database and OECD.
    Keywords: ethnicity; Gini-coefficient; human capital; income distribution; Inequality; migration; minority; skill allocation
    JEL: D33 E25 F22 J15 J61 O15
    Date: 2008–07

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