nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒08‒06
eighteen papers chosen by
Fabio Sabatini
University of Siena

  1. Human capital and economic activity in urban America By Jaison R. Abel; Todd M. Gabe
  2. International TFP Dynamics and Human Capital Stocks: a Panel Data Analysis, 1960-2003 By Adriana Di Liberto; Francesco Pigliaru; Piergiorgio Chelucci
  3. Intergenerational Persistence in Educational Attainment in Italy By Checchi, Daniele; Fiorio, Carlo V.; Leonardi, Marco
  4. The Intergenerational Transmission of Income and Education: A Comparison of Japan and France By Arnaud LEFRANC; Fumiaki OJIMA; Takashi YOSHIDA
  5. Brain drain, R&D-cost differentials and the innovation gap By Fabio Mariani
  6. Rising Income Inequality: Technology, or Trade and Financial Globalization? By Chris Papageorgiou; Subir Lall; Florence Jaumotte
  7. Does the Color of the Collar Matter? Firm Specific Human Capital and Post-Displacement Outcomes By Schwerdt, Guido; Ichino, Andrea; Ruf, Oliver; Winter-Ebmer, Rudolf; Zweimüller, Josef
  8. Risk-Return Trade-Offs to Complete Educational Paths: Vocational, Academic and Mixed By Simone Tuor; Uschi Backes-Gellner
  9. Environmental Policy, Education and Growth: A Reappraisal when Lifetime Is Finite By Xavier Pautrel
  10. Learning by Doing By Peter Thompson
  11. Learning from experience or learning from others? Inferring informal training from a human capital earnings function with matched employer–employee data By Guillaume Destré; Louis Lévy-Garboua; Michel Sollogoub
  13. The Socio-Economic Gap in University Drop Out By N Powdthavee; A Vignoles
  14. Immigration Accounting: U.S. States 1960-2006 By Giovanni Peri
  15. The Impact of Job Training on the Performances of Moroccan Firms: Empirical Evidence with Firm-Level Panel Data By Saïd Hanchane; Audrey Dumas
  16. Job Mobility in Ireland By Adele Bergin
  17. A Social Network Analysis of Occupational Segregation By Marco J. van der Leij; I. Sebastian Buhai
  18. Cognitive Skills Explain Economic Preferences, Strategic Behavior, and Job Attachment By Burks, Stephen V.; Carpenter, Jeffrey P.; Goette, Lorenz; Rustichini, Aldo

  1. By: Jaison R. Abel; Todd M. Gabe
    Abstract: This paper examines the relationship between human capital and economic activity in U.S. metropolitan areas, extending the existing literature in two important ways. First, we utilize new data on metropolitan-area GDP to measure economic activity. Using educational attainment as an indicator of human capital, we find that a one-percentage-point increase in the proportion of residents with a college degree is associated with a 2.3 percent increase in metropolitan-area GDP per capita. Second, we move beyond the conventional proxy for human capital (educational attainment) to develop new measures that reflect the types of knowledge within U.S. metropolitan areas. Results show that knowledge associated with the provision of producer services and information technology are particularly important determinants of economic vitality in U.S. metropolitan areas.
    Keywords: Human capital ; Metropolitan areas - Statistics ; Gross domestic product ; Education - Economic aspects
    Date: 2008
  2. By: Adriana Di Liberto; Francesco Pigliaru; Piergiorgio Chelucci
    Abstract: This paper adopts a fixed-effect panel methodology that enables us to take into account both TFP and neoclassical convergence. We use a sample of 76 countries, 1960-2003 and estimate TFP values obtained by using different estimators such as LSDV, Kiviet-corrected LSDV, and GMM à la Arellano and Bond. In our estimates, cross-country TFP dynamics shows that most countries in the sample do not catch up with the USA. We also find conditional convergence in TFP levels and that human capital acts as a robust enhancing factor of technology adoption, as suggested by Nelson and Phelps in 1966. In contrast with previous evidence, in our results even very low level of human capital stocks allow a country to enter a “conditional TFP convergence club” – a result again consistent with the original version of the Nelson-Phelps hypothesis. Further, our results imply a plausible link between stages of development and returns to different levels of education. Finally, the positive influence of human capital on technology catch up is robust to the inclusion of controls for a country’s institutional quality.
    Keywords: TFP, catching up, panel data, human capital
    JEL: O47 O33 C23
    Date: 2008
  3. By: Checchi, Daniele (University of Milan); Fiorio, Carlo V. (University of Milan); Leonardi, Marco (University of Milan)
    Abstract: In this paper we show that there is a reduction in the correlation coefficient between father and children schooling levels over time in Italy. However, focusing on equality of circumstances, we show that there is still a persistent difference in the odds of attaining a college degree between children of college educated parents and children of parents with lower secondary education attainment. The explanation of these trends lies in differential impact of liquidity constraints and risk aversion. Some descriptive evidence on the persistent differential in returns to college education depending on father’s education is also provided.
    Keywords: educational attainment, Italy, family background
    JEL: J62 I38
    Date: 2008–07
  4. By: Arnaud LEFRANC; Fumiaki OJIMA; Takashi YOSHIDA
    Abstract: The paper compares the extent of intergenerational earnings and educational correlation in Japan and France. It uses very similar repeated surveys that provide information on educational attainment and family background, conducted in Japan and France. To insure comparability, similar sample restrictions and specifications are imposed. For Japan, we use waves 1965, 1975, 1985, 1995 and 2005. For France, we use waves 1965, 1970, 1977, 1985, 1993 and 2003. Intergenerational elasticity in years of education can be readily estimated using available information. On the other hand, intergenerational earnings elasticity cannot be directly measured given the lack of information on parental income in both surveys. This leads us to apply Bjorklund and Jantti (1999) two sample instrumental variables estimation strategy. Lastly, we discuss to what extent differences in earnings mobility is related to differences in educational mobility and to differences in returns to education between the two countries.
    Keywords: intergenerational mobility; earnings education; Japan; France; education Japan France.
    Date: 2008–07–17
  5. By: Fabio Mariani (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: This paper aims at explaining why countries with comparable levels of education still experience notable differences in terms of R&D and innovation. High-skilled migration, ultimately linked to differences in R&D costs, might be responsible for the persistence of such a gap. In fact, in a model where human capital accumulation and innovation are strategic complements, we show that allowing labor outflows may strengthen educational incentives in the lagging economy if migration is probabilistic in nature, but at the same time reduces the share of innovative production. Income (growth) might be consequently affected, and a positive migration chance is very unlikely to act as a substitute for educational subsidies.
    Keywords: Innovation; Education; Brain drain.
    Date: 2008
  6. By: Chris Papageorgiou; Subir Lall; Florence Jaumotte
    Abstract: We examine the relationship between trade and financial globalization and the rise in inequality in most countries in recent decades. We find technological progress as having a greater impact than globalization on inequality. The limited overall impact of globalization reflects two offsetting tendencies: whereas trade globalization is associated with a reduction in inequality, financial globalization-and foreign direct investment in particular-is associated with an increase. A key finding is that both globalization and technological changes increase the returns on human capital, underscoring the importance of education and training in both developed and developing countries in addressing rising inequality.
    Keywords: Income distribution , Globalization , Foreign direct investment , Human capital , Education , Economic models , Trade models ,
    Date: 2008–07–24
  7. By: Schwerdt, Guido (Ifo Institute for Economic Research); Ichino, Andrea (University of Bologna); Ruf, Oliver (University of Zurich); Winter-Ebmer, Rudolf (University of Linz); Zweimüller, Josef (University of Zurich)
    Abstract: We investigate whether the costs of job displacement differ between blue collar and white collar workers. In the short run earnings and employment losses are substantial for both groups but stronger for white collar workers. In the long run, there are only weak effects for blue collar workers but strong and persistent effects for white collars. This is consistent with the idea that firm-specific human capital and internal labor markets are more important in white-collar than in blue collar jobs.
    Keywords: firm specific human capital, plant closures, matching
    JEL: J14 J65
    Date: 2008–07
  8. By: Simone Tuor (Institute for Strategy and Business Economics, University of Zurich); Uschi Backes-Gellner (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: This paper investigates the rates of return and the risks of different types of educational paths after compulsory education. We distinguish a purely academic educational path from a purely vocational path and a mixed path with loops through both systems. To study the labor market outcome we compare earnings and calculate net return rates as well as risk measures to investigate whether different educational paths are characterized by different risk-return trade-offs. We use Lazear’s jack-of-all-trades theory on entrepreneurship to derive testable predictions about the labour market outcome of different combinations of education for entrepreneurs and employees. Our empirical results are based on the Swiss Labor Force Survey (SLFS) and demonstrate that mixed educational paths are well rewarded in the labor market. However, a high return is also associated with a high income variance which is driven by those who end up as entrepreneurs.
    Keywords: risk-return trade-off, complete educational paths, occupational choice
    JEL: J24 I21 M53
    Date: 2008–06
  9. By: Xavier Pautrel (Nantes Atlantique Université)
    Abstract: This article demonstrates that when finite lifetime is introduced in a Lucas (1988) growth model, the environmental policy may enhance growth both in the short- and the long-run, while pollution does not influence educational activities, labor supply is not elastic and human capital does not enter the utility function. This is because finite lifetime and the appearance of newborns at each date creates a turnover of generations which disconnects the aggregate consumption growth to the interest rate. We show that the shorter is the horizon, the greater the effect of the environmental policy on growth, because the higher the “generational turnover effect”. We also demonstrate that when time is not the single production factor in education, the environmental policy promotes growth only if time remains the predominant factor. Otherwise, the crowding-out effect of the tighter environmental policy dominates the “generational turnover effect” and growth diminishes. Finally, when the source of pollution is final output rather than physical capital and time is the single factor in education, the environmental does not affect growth in the steady-state, despite the “generational turnover effect”. Nevertheless, if the education good is introduced, the positive influence of the environmental policy appears again.
    Keywords: Growth, Environment, Overlapping generations, Human capital
    JEL: C O
    Date: 2008–07
  10. By: Peter Thompson (Department of Economics, Florida International University)
    Abstract: This paper reviews the theoretical and empirical literature on learning by doing. Many of the distinctive theoretical implications of learning by doing have been derived under the assumption that the cost-quantity relationships observed in numerous empirical studies are largely the result of passive learning, and some further require that passive learning is unbounded. The empirical literature raises doubts about both assumptions. When observed cost-quantity relationships indicate sustained productivity growth, factors other than passive learning are generally at work. When passive learning is the dominant factor, productivity growth is invariably bounded. Thus, empirically-relevant theories incorporating learning by doing are hybrid models in which passive learning coexists with other sources of growth. But in such models, many of the distinctive implications of passive learning become unimportant. Moreover, passive learning is often an inessential component of long-run growth; to the contrary, too much learning can lead to stagnation.
    Keywords: Learning by doing, learning curves, passive learning, progress curves, cost-quantity relationship, knowledge spillovers, forgetting, endogenous growth, technological change.
    JEL: D24 D92 F12 L11 L16 O3
    Date: 2008–08
  11. By: Guillaume Destré (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Louis Lévy-Garboua (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I); Michel Sollogoub (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I)
    Abstract: A model of informal training which combines learning from own experience and learning from others is proposed in this paper. It yields a closed-form solution that revises Mincer–Jovanovic's [Mincer, J., Jovanovic, B., 1981. Labor mobility and wages. In: Rosen, S. (Ed.), Studies in Labor Markets. Chicago University Press, Chicago, pp. 21–64] treatment of tenure in the human capital earnings function. We estimate the structural parameters of this non-linear model on a large French cross-section with matched employer–employee data. We find that workers on average can learn from others 10% of their own human capital on entering one plant, and catch half of their learning from others’ potential in just 2 years. The private marginal returns to education are declining with education as more educated workers have less to learn from others and share the social returns of their own education with their less qualified co-workers. The potential for learning from others on the job varies across jobs and establishments, and this provides a new distinction between imitation jobs and experience jobs. Workers in imitation jobs, who learn most from others, tend to have considerably longer tenure than workers in experience jobs. Although workers in experience jobs can learn little from others, we find that they learn a lot by themselves. We document several analogies between the imitation jobs/experience jobs “dualism” and the primary/secondary jobs and firms’ dualism implied by the dual labor market theory. However, our binary classification of jobs depicts the data more closely than the dual theory categorization into primary-type and secondary-type establishments. Competition prevails between jobs and firms but jobs differ by their learning technology.
    Keywords: Human capital earnings functions; Matched employer–employee data; Informal training; Learning from others; Learning from experience; Returns to tenure; Social returns of education; Labor market dualism
    Date: 2008–06
  12. By: Thanasis Stengos (University of Guelph, Canada and The Rimini Centre for Economic Analysis, Italy); Costantina Kottaridi (University of Peloponnese, Greece)
    Abstract: This paper examines the effect of FDI on the process of economic growth by allowing the impact to differ both across each country and also across each time period. We apply non-parametric techniques taking into account the previously documented nonlinear effects of initial income and human capital on economic growth. We use a wide range of countries, both developed and developing in order to be able to distinguish potential differential effects between the two groups. Our findings suggest that FDI inflows have a moderately nonlinear effect on growth and that the human capital nonlinear effect in the presence of FDI inflows is similar to the one found elsewhere in the relevant literature. Classification-JEL: O47
    Keywords: cross country growth regressions, FDI, human capital, semi-parametric additive model
    Date: 2008–01
  13. By: N Powdthavee; A Vignoles
    Abstract: It has been shown in the recent literature on widening participation that in England a disadvantaged pupil has as much a chance of attending a university as a more advantaged student, provided that s/he manages to reach a sufficient level of achievement at the secondary school level. This finding leads to an important conclusion of no genuine socio-economic gap in university participation once prior attainments have been taken into account. The current article investigates whether the same conclusion can be reached with respect to university drop-out. Using a combination of school and higher education administrative data sets, we are able to show that there is indeed a sizeable and statistically significant gap in the rate of withdrawal after the first year of university between the most advantaged and disadvantaged English students. This socio-economic gap in university drop-out remains even after allowing for their personal characteristics, prior achievement and institution choice. Our results thus suggest that the use of raw drop out rates in the English university 'league table' as one of the main indicators of university efficiency can be quite misleading given that the ranking of universities by drop out rate would change markedly if the prior attainment of students were taken fully into account.
    Keywords: Drop out rate; Higher Education; Prior achievement; Socio-economic gap.
    Date: 2008–07
  14. By: Giovanni Peri (UC Davis and NBER)
    Abstract: Different U.S. states have been affected by immigration to very different extents in recent years. Immigration increases available workers in a state economy and, because of its composition across education groups, it also increases the relative supply of less educated workers. However, immigration is more than a simple labor supply shock. It brings differentiated skills and more competition to the labor market and it may induce efficient specialization and affect the choice of techniques. Immigrants also affect investments, capital accumulation, and the productivity of more and less educated workers. Using a production function-based procedure and data on gross state product, physical capital and hours worked we analyze the impact of immigration on production factors (capital, more and less educated labor), and productivity over the period 1960-2006 for 50 U.S. states plus D.C. We apply growth accounting techniques to the panel of states in order to identify the changes in factors and productivity associated with immigration. To identify a causal impact we use the part of immigration that is determined by supply shifts in countries of origin and the geographical location of U.S. states or historical immigrants’ settlements. We find that immigration significantly increased the relative supply of less educated workers, that it did not affect much the level of capital per worker and that it significantly increased the productivity of highly educated workers and, even more, less educated workers. These channels together explain the small effect of immigrants on wages of less educated workers and the significant positive effects on wages of more educated workers.
    Keywords: Immigration, Investment, Supply of skills, Productivity of workers, US States.
    JEL: F22 J61 R11
    Date: 2008–07
  15. By: Saïd Hanchane (Université de la Méditerranée, Aix-en-Provence Cedex, France); Audrey Dumas (Université de la Méditerranée, Aix-en-Provence Cedex, France)
    Abstract: The aim of this paper is to evaluate the effects of job training program, as part of the special training contracts (contrats spéciaux de formation) prompted by the Moroccan government, on the performances of Moroccan firms. Using firm level panel data, we highlight that the special training contracts is an efficient measure of public policy. Indeed, job training programs increase the competitiveness and the performances of Moroccan firms. Besides, these effects are even better when the implementation of training by Moroccan firms is part of a real strategy of human resources development. On the contrary, when firms consider the public policy only as a financing opportunity, they are severly sanctioned.
    Keywords: Job-training, Competitiveness, Development, Management of human resources
    Date: 2008–06
  16. By: Adele Bergin (Economics, National University of Ireland, Maynooth and ESRI, Dublin)
    Abstract: This paper investigates the factors that determine job-to-job mobility in Ireland over the period 1995 to 2001. It finds that labour market experience, working in the public sector, human capital, whether a person is overskilled and the sector they work in are important determinants of job change. In addition, the paper finds the rate of job mobility in Ireland practically doubled over the period. The sample is divided into two time periods and a decomposition technique is applied to ascertain how much of the increase in mobility is attributable to compositional changes and how much is due to other factors
    Keywords: Job Mobility
  17. By: Marco J. van der Leij (University of Alicante); I. Sebastian Buhai (University of Alicante)
    Abstract: We develop a social network model of occupational segregation between different social groups, generated by the existence of positive inbreeding bias among individuals from the same group. If network referrals are important for job search, then expected homophily in the contact network structure induces different career choices for individuals from different social groups. This further translates into stable occupational segregation equilibria in the labor market. We derive the conditions for wage and unemployment inequality in the segregation equilibria and characterize first and second best social welfare optima. Surprisingly, we find that socially optimal policies involve segregation.
    Keywords: Social Networks, Homophily, Inbreeding Bias, Occupational Segregation, Labor Market Inequality, Social Welfare
    JEL: J24 J31 J70 Z13
    Date: 2008–03
  18. By: Burks, Stephen V. (University of Minnesota, Morris); Carpenter, Jeffrey P. (Middlebury College); Goette, Lorenz (Federal Reserve Bank of Boston); Rustichini, Aldo (University of Minnesota)
    Abstract: Economic analysis has said little about how an individual’s cognitive skills (CS's) are related to the individual’s preferences in different choice domains, such as risk-taking or saving, and how preferences in different domains are related to each other. Using a sample of 1,000 trainee truckers we report three findings. First, we show a strong and significant relationship between an individual’s cognitive skills and preferences, and between the preferences in different choice domains. The latter relationship may be counterintuitive: a patient individual, more inclined to save, is also more willing to take calculated risks. A second finding is that measures of cognitive skill predict social awareness and choices in a sequential Prisoner's Dilemma game. Subjects with higher CS's more accurately forecast others' behavior, and differentiate their behavior depending on the first mover’s choice, returning higher amount for a higher transfer, and lower for a lower one. After controlling for investment motives, subjects with higher CS’s also cooperate more as first movers. A third finding concerns on-the-job choices. Our subjects incur a significant financial debt for their training that is forgiven only after twelve months of service. Yet over half leave within the first year, and cognitive skills are also strong predictors of who exits too early, stronger than any other social, economic and personality measure in our data. These results suggest that cognitive skills affect the economic lives of individuals, by systematically changing preferences and choices in a way that favors the economic success of individuals with higher cognitive skills.
    Keywords: field experiment, risk aversion, ambiguity aversion, loss aversion, time preference, Prisoners Dilemma, social dilemma, IQ, MPQ, numeracy, U.S. trucking industry, for-hire carriage, truckload (TL), driver turnover, employment duration, survival model
    JEL: C81 C93 L92 J63
    Date: 2008–07

This nep-hrm issue is ©2008 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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