nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒07‒20
eight papers chosen by
Fabio Sabatini
University of Siena

  1. Human capital investment and growth: A dynamic education model By Ben Mimoun, Mohamed; Raies, Asma
  2. The dynamics of knowledge diversity and economic growth By Berliant, Marcus; Fujita, Masahisa
  3. Federalism, Education-Related Public Good and Growth when Agents are Heterogeneou By Floriana Cerniglia; Riccarda Longaretti
  4. Educational Attainment and Other Characteristics of the Self-Employed: An Examination using Data from the Panel Study of Income Dynamics By Chad Moutray
  5. An analysis of youth unemployment in the euro area By Ramon Gomez-Salvador; Nadine Leiner-Killinger
  6. The College Wage Premium and the Expansion of Higher Education in the UK By Ian Walker; Yu Zhu
  7. Changes in return to higher education in Poland 1998-2005. By Strawinski, Pawel
  8. Does a generous welfare state crowd out student effort? Panel data evidence from international student tests By Justina Fischer; Torberg Falch

  1. By: Ben Mimoun, Mohamed; Raies, Asma
    Abstract: The paper aims to explicitly determine the distribution of human capital across hierarchic educational stages along the transition process, and to analyse the determinants of its evolution. We apply optimal control principles in a model of endogenous growth with two successive stages of education. We show that with initial relative scarcity of advanced human capital, the duration of studies at the advanced level should increase until reaching its equilibrium level. We also find that, by raising the duration of studies at the advanced schooling level, improvements in the quality of education at this level also enhances the economy’s growth rate, both in the transition and in the long-run.
    Keywords: Human capital investment; growth; a dynamic model
    JEL: J24 H52 O40
    Date: 2008
  2. By: Berliant, Marcus; Fujita, Masahisa
    Abstract: How is long run economic growth related to the diversity of knowledge? We formulate and study a microeconomic model of knowledge creation, through the interactions among a group of heterogeneous R & D workers, embedded in a growth model to address this question. Income to these workers accrues as patent income, whereas transmission of newly created knowledge to all such workers occurs due to public transmission of patent information. The model features myopic R & D workers in a pure externality model of interaction. Surprisingly, in the general case for a large set of initial conditions we find that the equilibrium process of knowledge creation converges to the most productive state, where the population splits into smaller groups of optimal size; close interaction takes place within each group only. Equilibrium paths are found analytically. Long run economic growth is positively related to both the effectiveness of pairwise R & D worker interaction and to the effectiveness of public knowledge transmission.
    Keywords: knowledge creation; knowledge externalities; microfoundations of endogenous growth; knowledge diversity and growth
    JEL: D90 D83 O31
    Date: 2008–07–09
  3. By: Floriana Cerniglia; Riccarda Longaretti
    Abstract: In this paper we use an endogeneous-growth model with human capital and heterogeneous agents to analyse the relationship between fiscal federalism and economic growth. Results show that federalism, which allows education-related public good levels to be tailored on the human capital of heterogeneous agents, increases human capital accumulation. This in turn leads to higher rates of growth. The benefits of federalism are stronger the larger the intra-jurisdiction variance of agents’ human capital.
    Keywords: Fiscal Federalism, Endogenous Economic Growth, Overlapping Generations, Heterogeneous Agents
    JEL: H77 J24 O41
    Date: 2008–05
  4. By: Chad Moutray
    Abstract: This study examines the relationship between education and the choice to become an entrepreneur. In doing so, it builds on previous research linking entrepreneurial activity with educationalattainment. Weaver, Dickson, and Solomon (2006), for example, survey the literature on this topic, and find that individuals with more education are more likely to be self-employed and successful. Brush and Manolova (2004) write that “human capital is the starting point for obtaining and developing other types of resources when a new venture is founded and directly influences its start-up process, survival, performance, and strategic direction.”
    Date: 2008
  5. By: Ramon Gomez-Salvador (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Nadine Leiner-Killinger (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)
    Abstract: The paper starts by presenting some stylised facts on youth unemployment over the last two decades, both at the euro area and the country level. It shows that despite declining considerably over the last few years, youth unemployment has remained at a high level relative to other age groups in most euro area countries. The paper finds that there is a positive relationship between the share of young people in the total population and the youth unemployment rate, i.e. the smaller the share of young people in the population, the lower the risk of them being unemployed. At the same time, economic conditions are negatively correlated with the youth unemployment rate, i.e. the youth unemployment rate increases when the economic situation worsens. Moreover, robust results across the regression scenarios show that higher employment protection and minimum wages imply a higher youth unemployment rate, while active labour market policies (ALMPs) tend to reduce it. The results also indicate that the increasing share of services employment in total employment is helping to reduce unemployment among young persons. Furthermore, the increase in the youth inactivity rate, which is mainly due to the fact that there are more young people in education, is also linked to the overall decline in youth unemployment. Finally, as regards education, the results indicate that the number of years of education, the number of young people with vocational training and, to a lesser extent high scores in the PISA study, are associated with lower youth unemployment rates. The share of the young population not in school, however, is positively correlated with the unemployment rate. As youth unemployment is subject to certain country-specific features, each country should identify the relevant underlying sources of youth unemployment and react accordingly. Governments can make a positive contribution to the smooth transition of young persons fromeducation to the labour market by providing a well-functioning education system and labour market institutions that do not introduce distortions into the labour market. JEL Classification: I2, J11, J13, J21, J64.
    Keywords: Youth, unemployment, employment, demographic trends, institutions, education.
    Date: 2008–06
  6. By: Ian Walker (University of Warwick); Yu Zhu (University of Kent)
    Abstract: This paper reports estimates of the UK “college premium” for young graduates across successive cohorts from large cross section datasets for the UK pooled from 1994 to 2006 - a period when the higher education participation rate increased dramatically. The growth in relative labour demand suggests that graduate supply considerably outstripped demand which ought to imply a fall in the premium. We find no significant fall for men and even a large, but insignificant, rise for women. Quantile regression results reveal a fall in the premium only for men in the bottom quartile of the distribution of unobserved skills.
    Keywords: human capital, higher education, college premium
    JEL: I20 J3
    Date: 2008–04–30
  7. By: Strawinski, Pawel
    Abstract: In the article private rate of return to higher education in the 1998-2005 period is considered. The model is based on a comparative advantage theory. Extended Mincerian wage equation is used to account for a non-random decision to undertake studies at university level. The estimate of private rate of return in Poland is roughly 9%, and it is among the highest in Europe. In addition, the unexpected rise in rate of return is observed. Moreover, positive relationship between graduation and the obtained wages was found. This change has been linked to labour market transformation and Skill Biased Technical Change. Also the influence of financing tertiary education is considered.
    Keywords: return to education, private returns, skill biased technical change, sample selection.
    JEL: I20
    Date: 2008–06–02
  8. By: Justina Fischer; Torberg Falch
    Keywords: Student achievement; welfare state; panel data, PISA, TIMSS
    Date: 2008

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