nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒09‒29
fifteen papers chosen by
Fabio Sabatini
University of Siena

  1. Does School Privatization Improve Educational Achievement? Evidence from Sweden's Voucher Reform By Böhlmark, Anders; Lindahl, Mikael
  2. Human Capital Prices, Productivity and Growth By Audra J. Bowlus; Chris Robinson
  3. Economic Reforms, Human Capital, and Economic Growth in India and South Korea: A Cointegration Analysis By Svitlana Maksymenko; Mahbub Rabbani
  4. Does the color of the collar matter? Firm specific human capital and post-displacement outcomes By Guido Schwerdt; Andrea Ichino; Oliver Ruf; Rudolf Winter-Ebmer; Josef Zweimüller
  5. Human Capital, Multiple Income Risk and Social Insurance By Schindler, Dirk
  6. Peer Effects and Human Capital Accumulation: the Externalities of ADD By Anna Aizer
  7. Job-Related Training and Benefits for Individuals: A Review of Evidence and Explanations By Bo Hansson
  8. School vouchers and student achievement: recent evidence, remaining questions By Lisa Barrow; Cecilia Elena Rouse
  9. Entrepreneurship in Economic Development By Naude, Wim
  10. Group Differences in Educational Attainment Among the Children of Immigrants By Abada, Teresa; Hou, Feng; Ram, Bali
  11. Returns to Education and Increasing Wage Inequality in Latin America By Chiara Binelli
  12. The Effect of High School Employment on Educational Attainment: A Conditional Difference-in-Differences Approach By Buscha, Franz; Maurel, Arnaud; Page, Lionel; Speckesser, Stefan
  13. Earning Motivation and The Conventional Earning Function By Muhammad Purnagunawan
  14. Gender and Racial Training Gaps in Oregon Apprenticeship Programs By Günseli Berik; Cihan Bilginsoy; Larry S. Williams
  15. An Exploratory Study of the Role of Educational Incentives in Primary Education in Gujarat By Banerjee Tathagata

  1. By: Böhlmark, Anders (SOFI, Stockholm University); Lindahl, Mikael (Uppsala University)
    Abstract: This paper evaluates general achievement effects of choice and competition between private and public schools at the nine-year school level by assessing a radical voucher reform that was implemented in Sweden in 1992. Starting from a situation where the public schools essentially were monopolists on all local school markets, the degree of privatization has developed very differently across municipalities over time as a result of this reform. We estimate the impact of an increase in private enrolment on short, medium and long-term educational outcomes of all pupils using within-municipality variation over time, and control for differential pre-reform and concurrent municipality trends. We find that an increase in the private school share moderately improves short-term educational outcomes such as 9th-grade GPA and the fraction of students who choose an academic high school track. However, we do not find any impact on medium or long-term educational outcomes such as high school GPA, university attainment or years of schooling. We conclude that the first-order short-term effect is too small to yield lasting positive effects.
    Keywords: private schooling, choice, competition, educational achievement
    JEL: I22 I28 H40
    Date: 2008–09
  2. By: Audra J. Bowlus (University of Western Ontario); Chris Robinson (University of Western Ontario)
    Abstract: Separate identification of the price and quantity of human capital has important implications for understanding key issues in labor economics and macroeconomics. Price and quantity series are derived and subjected to robustness checks. The human capital price series associated with different education levels are highly correlated and exhibit a strong secular trend. Three resulting implications are explored: (1) using the derived quantities life-cycle profiles are re-examined; (2) the rising college premium is reinterpreted and found to be mainly driven by relative quantity changes, and (3) adjusting the labor input for quality increases dramatically reduces the contribution of MFP to growth.
    Date: 2008
  3. By: Svitlana Maksymenko; Mahbub Rabbani
    Abstract: . . .
    JEL: O10 O15 O47 O53
    Date: 2008–08
  4. By: Guido Schwerdt; Andrea Ichino; Oliver Ruf (University of Zurich, Switzerland); Rudolf Winter-Ebmer; Josef Zweimüller
    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 workes. 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: 2008–09
  5. By: Schindler, Dirk (University of Konstanz)
    Abstract: We set up an OLG-model, where households both choose human capital investment and decide on investing their endogenous savings in a portfolio of riskless and risky assets, exposing them to (aggregate) wage and capital risks due to technological shocks. We derive the optimal public policy mix of taxation and education policy. We show that risks can be efficiently diversified between private and public consumption. This results hinges on that the government can apply a wide set of instruments, including differentiated wage and capital taxation. We also show that for sufficient risk aversion the (Northern) European way of relying on progressive wage taxation and granting education subsidies is an optimal response to wage and capital risks.
    Keywords: Optimal Income Taxation; Multiple Income Risks; Human Capital Investment; Portfolio Choice
    JEL: H21 I28 J24
    Date: 2008–09–22
  6. By: Anna Aizer
    Abstract: Although recent work has shown that peers affect human capital accumulation, the mechanisms are not well understood. Knowing why high achieving peers matter, because of their innate ability, disciplined behavior or some other factor, has important implications for our understanding of the education production function and for how we organize schools and classrooms. In this paper I provide evidence that peer behavior is an important mechanism. To identify the impact of peer behavior on achievement separate from ability or other characteristics, I exploit exogenous improvements in classmates' inattention/impulsivity that result from a diagnosis of ADD. After children with ADD are diagnosed, I show that their behavior improves, but that no other characteristics, including achievement, change. I find that peer behavior significantly affects cognitive achievement and that resources such as class size can overcome the negative peer effects observed, consistent with the model of education production proposed by Lazear (2001). These findings have important implications for our understanding not only of peer effects but also of the relationship between health, productivity and growth.
    JEL: I1 I18 I2
    Date: 2008–09
  7. By: Bo Hansson
    Abstract: This paper reviews the literature on job-related training and the effects of these investments for different groups of individuals. The paper also elaborates on the theories, empirical explanations, and policy implications that can be drawn from these findings. Employer-provided training is by far the most important source of further education and training after an individual enters the labour market. A substantial portion of these human capital investments are financed by firms and it appears that the contribution by individuals are in most circumstances relatively modest. At the same time, substantial gains for individuals participating in training are documented in a large number of studies. The benefits are not only confined to wage returns as research has also shown that training leads to increased internal employability and job-security; and external labour market effects such as higher labour participation rates, lower unemployment, and shorter unemployment periods. Training is not equally distributed among employees. Older, low skilled workers, and to some extent female workers typically receive less training than other groups of employees. However, we do not find any clear-cut evidence that returns to training varies with gender, educational or skills levels, which suggests that inequalities do not arise because of differences in returns to training, but are more a consequence of inequalities of the distribution of training investments. The findings of this review further suggest that the returns to training are higher in the case that it is financed by the employer and that the returns to training are substantially higher for those leaving for a new employer. Employer-financed training appears, however, to lower the probability of an individual leaving for a new job elsewhere. The analysis of the distribution of returns to training reveals that although individuals benefit from these investments, the employer reaps most of the returns to training which suggests that the productivity effects are substantially larger than wage effects.
    Date: 2008–07–15
  8. By: Lisa Barrow; Cecilia Elena Rouse
    Abstract: In this article, we review the empirical evidence on the impact of education vouchers on student achievement, and briefly discuss the evidence from other forms of school choice. The best research to date finds relatively small achievement gains for students offered education vouchers, most of which are not statistically different from zero. Further, what little evidence exists regarding the potential for public schools to respond to increased competitive pressure generated by vouchers suggests that one should remain wary that large improvements would result from a more comprehensive voucher system. The evidence from other forms of school choice is also consistent with this conclusion. Many questions remain unanswered, however, including whether vouchers have longer-run impacts on outcomes such as graduation rates, college enrollment, or even future wages, and whether vouchers might nevertheless provide a cost-neutral alternative to our current system of public education provision at the elementary and secondary school level.
    Date: 2008
  9. By: Naude, Wim
    Abstract: What is the role of entrepreneurship in economic development? At a minimum the answer should be able to explain the role of entrepreneurs in the structural transformation of countries from low income, primary-sector based societies into high-income service and technology based societies. More broadly though, it should also be able to explain the role of entrepreneurs in the opposite pole of stagnating development (including conflict) and in high innovation-driven growth. Although economic development lacks a ?general theory? of entrepreneurship, which could encompass a variety of development experiences, much progress has been made in extending the understanding of entrepreneurship in the process of development. This paper surveys the progress with the purpose of distilling the outlines for a more general theory of entrepreneurship in economic development. Entrepreneurship in developing countries remains a relatively under-researched phenomenon, so by surveying the current state of research, and by discussing the role of entrepreneurship in dual economy models of structural transformation and growth, a secondary objective of this paper is to identify avenues for further research. Finally, the policy implications from the economic literature suggest that a case for government support exists, and that this should focus on the quantity, the quality, and the allocation of entrepreneurial ability. Many routinely adopted policies for entrepreneurship, such as provision of credit and education, are shown to have more subtle effects, not all of which are conducive to growth-enhancing entrepreneurship.
    Keywords: entrepreneurship, economic development, small business
    Date: 2008
  10. By: Abada, Teresa; Hou, Feng; Ram, Bali
    Abstract: Using the 2002 Ethnic Diversity Survey, this article examines the group differences by national origin in university educational attainment among the children of immigrants in Canada. We found that children of immigrant parents in most source region groups achieve higher university completion rates than children of Canadian-born parents, partly due to higher education levels of their parents. Children of Chinese and Indian immigrants particularly attain higher academic achievements than children of Canadian-born parents. Parental education was also important in explaining the relatively low university completion rates among the second-generation Portuguese.
    Keywords: Education, training and learning, Ethnic diversity and immigration, Educational attainment, Education, training and skills, Ethnic groups and generations in Canada, Outcomes of education
    Date: 2008–09–22
  11. By: Chiara Binelli (Oxford University, UK; Institute for Fiscal Studies, UK and The Rimini Centre for Economic Analysis, Italy)
    Abstract: This paper studies a central feature that characterized the changes in wage inequality in Latin America in the 1990s: log wages became a convex function of the level of education. The wage gap between Higher and Intermediate Education increased and the one between Intermediate and Basic Education declined. The double change in the wage di¤erentials was driven by a signicant drop in the mean wage at Intermediate. I develop and simulate a dynamic general equilibrium model of savings and educational choices under credit constraints and uninsurable earningsrisk in which ability is an important component of individual wages. I estimate the parameters of the model using micro data from Mexico. The results show that the convexication was the result of changes in the prices of education due to changes in its supply. Absent the general equilibrium price e¤ects, the changes in ability composition by education needed to produce the convexication would have been unrealistically high.
    Keywords: Latin America, Wage Inequality, Education Choices, General Equilibrium filtering
    JEL: J23 J24 J31 C68
    Date: 2008–01
  12. By: Buscha, Franz (University of Westminster); Maurel, Arnaud (ENSAE-CREST); Page, Lionel (University of Westminster); Speckesser, Stefan (University of Westminster)
    Abstract: Using American panel data from the National Educational Longitudinal Study of 1988 (NELS:88) this paper investigates the effect of working during grade 12 on attainment. We exploit the longitudinal nature of the NELS by employing, for the first time in the related literature, a semiparametric propensity score matching approach combined with difference-in- differences. This identification strategy allows us to address in a flexible way selection on both observables and unobservables associated with part-time work decisions. Once such factors are controlled for, insignificant effects on reading and math scores are found. We show that these results are robust to a matching approach combined with difference-in-difference-in-differences which allows differential time trends in attainment according to the working status in grade 12.
    Keywords: education, evaluation, propensity score matching
    JEL: J24 J22 I21
    Date: 2008–09
  13. By: Muhammad Purnagunawan (Department of Economics, Padjadjaran University)
    Abstract: People have different motivation for having a paid job, and this might came from different expectation, value and also gender roles. Nevertheless, most analysis of earning determinant has neglected this possibility. Using data from Household, Income and Labour Dynamics (HILDA) in Australia in 2001 and 2004, this paper investigates the structure of human capital earning equation and its stability after controlling for earning motivation. The results suggest that some measure of earning motivation have effects. However, even after controlling for earning motivation, the returns to schooling and experience do not change significantly. This suggests that the conventional earning function is stable and robust with respect to the influences of earning motivation.
    Keywords: return to education, earning motivation, wage
    JEL: I2 J24 O15
    Date: 2008–09
  14. By: Günseli Berik; Cihan Bilginsoy; Larry S. Williams
    Abstract: This paper uses microdata from Oregon to measure the gender and minority training gaps in apprenticeship training. Its methodological innovation is the use of on-the-job training credit hours of exiting workers as the measure of the quantity of training. The trainees who started training between 1991 and 2002 are followed through 2007. Controlling for individual and program attributes, women and minorities on average receive less training than men and Whites, respectively. Union programs deliver more training than nonunion programs, regardless of gender and race. Prior education level has a strong impact on training, especially for women and minorities. The evidence does not support the hypothesis that apprentices who quit acquire sufficient level of training can reasonably be expected to get high-skill jobs.
    Keywords: Training, Gender, Race, Unions
    JEL: J15 J24 J51
    Date: 2008
  15. By: Banerjee Tathagata
    Abstract: This study explores the role of incentives—monetary or non-monetary compensation offered to children so that an educational need is fulfilled or perceived cost is brought down—in attaining certain expected educational enrolment and retention outcomes. It draws on a survey conducted in six villages in Gujarat. Incentives themselves may not be that critical in improving access and retention performance; other socio-economic and school-related factors may be more significant in ensuring access and retention. However, incentives may have help in keeping the poorer performers in school.
    Date: 2008–09–16

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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