nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒10‒07
thirteen papers chosen by
Fabio Sabatini
University of Siena

  1. Positive externalities of congestion, human capital, and socio-economic factors: A case study of chronic illness in Japan. By yamamura, eiji
  2. Wider impacts of microcredit: evidence from labor and human capital in urban Mexico By Nino-Zarazua, Miguel
  3. The great proletarian cultural revolution, disruptions to education, and returns to schooling in urban China By Giles, John; Park, Albert; Wang, Meiyan
  4. Are Over-educated People Insiders or Outsiders? A Case of Job Search Methods and Over-education in UK By Kucel, Aleksander; Byrne, Delma
  5. The Transmission of Women's Fertility, Human Capital and Work Orientation Across Immigrant Generations By Francine D. Blau; Lawrence M. Kahn; Albert Yung-Hsu Liu; Kerry L. Papps
  6. Historical Origins of Schooling: The Role of Democracy and Political Decentralization By Francisco Gallego
  7. Do smart cities grow faster? By de la Garza, Adrián G.
  8. A new challenge for higher education in Romania –entrepreneurial universities By Sitnikov, Catalina Soriana
  9. The future of the skilled labor force in New England: the supply of recent college graduates By Alicia Sasser
  10. Human Capital, Complex technologies, Firm size and Wages: A Test of the O-Ring Production Hypotheses By Yu, Li; Orazem, Peter
  11. Human Capital Risk and the Firmsize Wage Premium By Danny Leung; Alexander Ueberfeldt
  12. Children Capabilities and Family Characteristics in Italy By Tindara Addabbo; Maria Laura Di Tommaso
  13. Timing of Family Income, Borrowing Constraints and Child Achievement By Maria Knoth Humlum

  1. By: yamamura, eiji
    Abstract: This paper explores, using Japanese panel data for the years 1988-2002, how externalities from congestion and human capital influence deaths caused by chronic illnesses. Major findings through fixed effects 2SLS estimation were as follows: (1) the number of deaths were smaller in more densely-populated areas, and this tendency was more distinct for males; (2) higher human capital correlated with a decreased number of deaths, with the effect being greater in females than in males. These findings suggest that human capital and positive externalities stemming from congestion make a contribution to improving lifestyle, which is affected differently by socio-economic circumstance in males and females.
    Keywords: population density; education; chronic illness
    JEL: R58 I19
    Date: 2008–09–29
  2. By: Nino-Zarazua, Miguel
    Abstract: This paper presents an estimation of the impacts of microcredit on labor and human capital following a quasi-experiment specifically designed to control for endogeneity and selection bias in the context of urban Mexico. We find important indirect trickle-down effects of credit through labor expenditure that benefit poor laborers; however, these effects were only observed when loan-supported enterprising households reached a level of income well above the poverty line. We also find significant, although small impacts of credit on children´s schooling that could be potentially reinforced by improvements in lending technology, school grants and additional ex-ante preventive and ex-post protective riskcoping products.
    Keywords: microcredit; labor; children´s schooling; Mexico
    JEL: O18 O17 C24 O16 C81 C25
    Date: 2008–09–28
  3. By: Giles, John; Park, Albert; Wang, Meiyan
    Abstract: In determining whether a country's higher education system should be expanded, it is important for policymakers first to determine the extent to which high private returns to post-secondary education are an indication of the scarcity of graduates instead of the high unobserved ability of students who choose to attend post-secondary education. To this end, the paper identifies the returns to schooling in urban China using individual-level variation in educational attainment caused by exogenous city-wide disruptions to education during the Cultural Revolution from 1966 to 1976. For city-cohorts who experienced greater disruptions, children's educational attainment became less correlated with that of their fathers and more influenced by whether their fathers held administrative positions. The analysis calculates returns to college education using data from the China Urban Labor Survey conducted in five large cities in 2001. The results are consistent with the selection of high-ability students into higher education. The analysis also demonstrates that these results are unlikely to be driven by sample selection bias associated with migration, or by alternative pathways through which the Cultural Revolution could have affected adult productivity.
    Keywords: Education For All,Tertiary Education,Secondary Education,Primary Education,Population Policies
    Date: 2008–09–01
  4. By: Kucel, Aleksander (Pompeu Fabra University, Department of Political and Social Sciences, Barcelona, Spain); Byrne, Delma (Economic and Social Research Institute (ESRI))
    Keywords: over-education, networks, job search
    JEL: I21 J21 J24
    Date: 2008–09
  5. By: Francine D. Blau; Lawrence M. Kahn; Albert Yung-Hsu Liu; Kerry L. Papps
    Abstract: Using 1995-2006 Current Population Survey and 1970-2000 Census data, we study the intergenerational transmission of fertility, human capital and work orientation of immigrants to their US-born children. We find that second-generation women's fertility and labor supply are significantly positively affected by the immigrant generation's fertility and labor supply respectively, with the effect of mother's fertility and labor supply larger than that of women from the father's source country. The second generation's education levels are also significantly positively affected by that of their parents, with a stronger effect of father's than mother's education. Second-generation women's schooling levels are negatively affected by immigrant fertility, suggesting a quality-quantity tradeoff for immigrant families. We find higher transmission rates for immigrant fertility to the second generation than we do for labor supply or education: after one generation, 40-65% of any immigrant excess fertility will remain, but only 12-18 % of any immigrant annual hours shortfall and 18-36% of any immigrant educational shortfall. These results suggest a considerable amount of assimilation across generations toward native levels of schooling and labor supply, although fertility effects show more persistence.
    JEL: J1 J16 J22 J24 J61
    Date: 2008–10
  6. By: Francisco Gallego (Instituto de Economía. Pontificia Universidad Católica de Chile.)
    Abstract: Why does schooling attainment vary widely across countries? Why are differences in schooling attainment highly persistent? I show that cross-country differences in schooling are related to political institutions, such as democracy and local democracy (political decentralization), which are affected by colonial factors. By using the number of native cultures before colonization as an instrument for political decentralization, I show that, after controlling for the causal effect of income on schooling, the degree of democratization positively affects the development of primary education, whereas political decentralization has a positive and significant impact on more advanced levels of schooling.
    Keywords: Schooling, Political Decentralization, Democracy, Institutions, Colonialism, School Decentralization.
    JEL: I2 N3 O15
    Date: 2008
  7. By: de la Garza, Adrián G.
    Abstract: Previous studies have found a strong positive correlation between human capital, measured as the share of the adult population with a college degree, and population growth in metropolitan statistical areas (MSA) in the U.S. In this paper, I corroborate that the human capital-growth connection is indeed statistically significant, although much weaker than previously thought. The evidence suggests that the main reason behind this bias lies on endogeneity issues that have not been thoroughly addressed in the literature. In particular, omitting lagged MSA growth in regressions of current MSA growth on human capital overestimates the impact of skills by 100 per cent. Given that past growth has been shown to be one of the main drivers of current MSA growth (Glaeser 1994a), omitting the former variable in growth-education regressions would bias our human capital estimates upwards. Upon further examination, however, I show that MSA-specific fixed effects explain away the alleged impact of past on current growth. This suggests that the individual characteristics of the city that made it grew in the first place, and not lagged MSA growth per se, are what drives future MSA growth. Yet, even after accounting for these MSA-specific fixed effects, the impact of human capital on MSA growth does not disappear: my estimates suggest that a decadal increase of 10 per cent in the share of the adult population with a college degree translates into a rise of between 3 and up to 5 per cent in the MSA population growth rate during the same period. Finally, instrumental variable regressions strongly support the direction from skills to growth, abating potential reverse causality concerns.
    Keywords: human capital; urban growth; skills; education; population changes
    JEL: J24 N34 R11
    Date: 2008–09
  8. By: Sitnikov, Catalina Soriana
    Abstract: Learning and teaching have always been at the core of economic change and development. For long time there was a search for suggestions, ideas, plans and projects of how educational systems can be made more relevant to the needs of the societies they were established to serve. Implementing the Bologna principles and following the priorities of Lisbon strategy, Romanian education system and, particularly, the higher education system, reconsiders and rebuilds its vision and mission as well as its entire strategy. In this regard, the following basic elements are considered in the paper: •What is learned must be relevant to the needs of the people in economy. Educational providers need to be in touch with labour market requirements; •Effective learning must be judged on the basis of the outcomes that result, rather than on the inputs required; •Ways must be found to facilitate learning rather than to simply supply instruction; •The valueing of research and innovation within educational organizations must be increased; •Tailor made “entrepreneurial” education towards the necessities of the market, especially focused on small and medium size enterprises; •The lifelong learning –education permanence- should be continuously developed and be linked to the market requirements. The role and the main influences that higher education system will have over economic and human resources development are underlined. Also, appreciating that entrepreneurship becomes more and more one of the most important factors of development, the education and economic development are linked through the concept of “entrepreneurial university”.
    Keywords: higher education; economic development; entrepreneurial university
    JEL: I2 O15 M13
    Date: 2008–09–26
  9. By: Alicia Sasser
    Abstract: One of New England’s greatest assets is its skilled labor force, historically an engine of economic growth in the region. Yet the population of recent college graduates—the skilled labor force of the future—has been growing more slowly in New England than elsewhere in the country. ; The need to attract and retain recent college graduates has become a salient issue in every New England state. Policymakers and business leaders alike are concerned that an inadequate supply of skilled workers will hamper economic growth by creating barriers for companies looking to locate or expand within the region. ; However, policymakers have taken only preliminary steps to tackle this challenge because they lack information on the extent of the problem, its root causes, and how best to address it. To help close that gap, this report explores several key questions, including which factors affect New England’s stock of recent college graduates, how those factors have changed over time, and their relative importance in explaining the recent slowdown. The ensuing analysis leads to several conclusions that run contrary to conventional wisdom.
    Keywords: Labor supply - New England ; College graduates - New England
    Date: 2008
  10. By: Yu, Li; Orazem, Peter
    Abstract: Kremer’s O-Ring production theory (QJE, 1993) describes a process in which a single mistake in any one of several tasks in firm’s production process can lead to catastrophic failure of the product’s value. This paper tests the predictions of the O-Ring theory in the context of a single market for a relatively homogeneous product: hog production. Consistent with the theory, the most skilled workers concentrate in the largest and most technologically advanced farms and are paid more. As with observed skills, workers with the greatest endowments of unobserved skills also sort themselves into the largest and most technology intensive farms.
    JEL: L1
    Date: 2008–09–24
  11. By: Danny Leung; Alexander Ueberfeldt
    Abstract: Why do employed persons in large firms earn more than employed persons in small firms, even after controlling for observable characteristics? Complementary to previous results, this paper proposes a mechanism that gives an answer to this question. In the model, individuals accumulate human capital and are exposed to the risk of losing some of their human capital as they change jobs, voluntarily or involuntarily. The model, calibrated to the United States and Canada, accounts for one-third of the firmsize wage premium. Regarding the earnings gap between Canada and the United States, the model finds that it is solely due to differences in labor market uncertainty.
    Keywords: Economic models; Labour markets; Productivity
    JEL: J24 J31
    Date: 2008
  12. By: Tindara Addabbo; Maria Laura Di Tommaso
    Abstract: This paper explores the possibilities of using structural equation modelling to measure capabilities of Italian children. In particular the paper focuses on two capabilities: “Senses, Imagination and Thought” and “Leisure and Play Activities ”. The indicators used to measure the capability of ‘Senses, imagination and thought’ for 6-13 years old children are attitude towards education, attendance to arts classes and other type of extra curriculum classes like computing and languages. The variables used as indicators of the capability of “Leisure and play activities” include how often children play in playground, various types of games, attendance to sports classes. We use both descriptive statistics, an ordered probit model, and a structural equation model in order to investigate the relation among the above mentioned indicators, the latent construct for capabilities and a set of covariates. Moreover we use a new data set in order to include family income among the covariates. The data result from the matching (through a propensity score method) of two data sets: Bank of Italy Survey on Income and Wealth for year 2000 and Istat Families, social subjects and childhood condition for year 1998.
    Keywords: Education, Capabilities, Child Well Being, Structural Equation Modelling
    JEL: I2 C1 J1
    Date: 2008–06
  13. By: Maria Knoth Humlum (School of Economics and Management, University of Aarhus, Denmark)
    Abstract: In this paper, I investigate the effects of the timing of family income on child achievement production. Detailed administrative data augmented with PISA test scores at age 15 are used to analyze the effects of the timing of family income on child achievement. Contrary to many earlier studies, tests for early borrowing constraints suggest that parents are not constrained in early investments in their children's achievement, and thus that the timing of income does not matter for long-term child outcomes. This is a reasonable result given the setting in a Scandinavian welfare state with generous child and education subsidies. Actually, later family income (age 12-15) is a more important determinant of child achievement than earlier income.
    Keywords: child human capital, timing of family income
    JEL: I2 J24
    Date: 2008–10–01

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