nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2008‒12‒14
eleven papers chosen by
Fabio Sabatini
University of Siena

  1. Human Capital and New Firm Formation By Karlsson, Charlie; Backman, Mikaela
  2. Intangible Investment in Japan: New Estimates and Contribution to Economic Growth By Kyoji Fukao; Tsutomu Miyagawa; Kentaro Mukai; Yukio Shinoda; Konomi Tonogi
  3. Managerial Talent, Motivation, and Self-Selection into Public Management By Josse Delfgaauw; Robert Dur
  4. Inter-firm labor mobility and knowledge diffusion: a theoretical approach By Montserrat Vilalta-Bufi, Departament de Teoria Economica and CAEPS (Universitat de Barcelona) and; Departament d'Economia i Historia Economica (Universitat Autonoma de Barcelona)
  5. A Longitudinal Analysis of Within-Education-Group Earnings Inequa By Gustavsson, Magnus
  6. Adult longevity and economic take-off : from Malthus to Ben-Porath By David, DE LA CROIX
  7. Dropping out and revising educational decisions: Evidence from vocational education By Donata Bessey; Uschi Backes-Gellner
  8. How Mandatory Pensions Affect Labor Supply Decisions and Human Capital Accumulation? Options to Bridge the Gap between Economic Theory and Policy Analysis By Bodor , Andras; Robalino, David; Rutkowski, Michal
  9. Improving Educational Outcomes for Poor Children By Brian Jacob; Jens Ludwig
  10. Training Without Certification : An Experimental Study By Nadège Marchand; Claude Montmarquette
  11. Physical Capital, Knowledge Capital and the Choice Between FDI and Outsourcing By Yongmin Chen; Ignatius J. Horstmann; James R. Markusen

  1. By: Karlsson, Charlie (Jönköping International Business School); Backman, Mikaela (Jönköping International Business School)
    Abstract: This paper investigates the impact human capital has on new firm formation, traditionally expected to have a positive influence. Individuals are attracted to regions with a stimulating atmosphere and tend to stay within the same region. Since human capital is partly spatially bounded, the size of municipality accessibility to human capital is expected to have a larger impact than intra-regional and inter-regional interaction. The empirical analysis is based on data on new firm formation at the municipality level in Sweden and accessibility to human capital, defined as minimum three years at tertiary level. The new firm formation is both measured in absolute and in relative terms. In the analysis, the municipalities are divided into four groups; (i) all municipalities, (ii) central municipalities (ii) municipalities within the hinterland in large functional regions and (iii) municipalities within the hinterland in small functional regions. This is done to make the comparison easy. The results indicate that it is the local market, measured as the size of the municipality accessibility to human capital that has a positive impact on new firm formation. Income per capita has a positive impact and average firm size has a negative impact on new firm formation.
    Keywords: human capital; new firm formation; municipalities; accessibility; Sweden
    JEL: L26 R11
    Date: 2008–04–03
  2. By: Kyoji Fukao; Tsutomu Miyagawa; Kentaro Mukai; Yukio Shinoda; Konomi Tonogi
    Abstract: The purpose of this paper is to measure intangible assets, to construct the capital stock of intangible assets, and to examine the contribution of intangible capital to economic growth in Japan. We follow the approach of Corrado, Hulten, and Sichel (2005, 2006) to measure intangible investment using the 2008 version of the Japan Industrial Productivity (JIP) Database. We find that the ratio of intangible investment to GDP in Japan has risen during the past 20 years and now stands at 11.6%, which is lower than the ratio estimated for the United States in the early 2000s. The ratio of intangible to tangible investment in Japan is also lower than equivalent values estimated for the United States. In addition, we find that, in stark contrast with the United States, where intangible capital grew rapidly in the late 1990s, the growth rate of intangible capital in Japan declined from the late 1980s to the early 2000s. In order to examine the robustness of our results, we also conducted a sensitivity analysis and found that the slowdown of the contribution of intangible capital deepening to economic growth and the recovery in Multi-Factor Productivity (MFP) growth from the second half of the 1990s observed in our base case remain unchanged even if we take on-the-job training and Japanese data with respect to investment in firm-specific resources into account.
    Keywords: intangible investment, labor productivity, growth accounting
    JEL: E22 O32 O47
    Date: 2008–12
  3. By: Josse Delfgaauw (Erasmus University Rotterdam); Robert Dur (Erasmus University Rotterdam, and IZA)
    Abstract: The quality of public management is a recurrent concern in many countries. Calls to attract the economy's best and brightest managers to the public sector abound. This paper studies self-selection into managerial and non-managerial positions in the public and private sector, using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation. We find that, if demand for public sector output is not too high, the equilibrium return to managerial ability is always highest in the private sector. As a result, relatively many of the more able managers self-select into the private sector. Since this outcome is efficient, our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private-sector levels is not cost-efficient.
    Keywords: Public Management; Public Service Motivation; Managerial Ability; Self-Selection
    JEL: H83 J24 J3 J45
    Date: 2008–10–14
  4. By: Montserrat Vilalta-Bufi, Departament de Teoria Economica and CAEPS (Universitat de Barcelona) and; Departament d'Economia i Historia Economica (Universitat Autonoma de Barcelona) (Universitat de Barcelona)
    Abstract: We analyze an economy with two main features: labor mobility goes together with knowledge transfer and firm productivity increases with the exchange of ideas. Each firm develops some specific knowledge that will be transmitted to the rest of the industry through the mobility of workers. We study two labor market settings and use comparative statics to derive the implications of the model. They reveal how labor mobility depends on the variety and level of knowledge, the presence of mobility costs, the institutional environment, the absorptive capacity of the firms and the size of the industry. Results are robust to different labor market settings.
    Keywords: exchange of knowledge, inter-firm labor mobility, knowledge diffusion
    JEL: J61 J23 O33
    Date: 2008
  5. By: Gustavsson, Magnus (Department of Economics)
    Abstract: Using a large Swedish longitudinal database for the period 1982–2005, I estimate and compare within-group inequality in persistent and transitory earnings among men with highschool and college degrees. Analyses of inequality over the life cycle reveal that experiencevariance profiles of persistent earnings are very similar across the two education groups and also consistent with standard human capital models of on-the-job training. Transitory earnings shocks display a marked U-shaped variance pattern over the life-cycle for both groups, but are clearly larger for high-school graduates and also account for a larger proportion of their overall variance. Analyses of changes in within-group inequality over time, holding life-cycle effects constant, show that high-school and college graduates have been subject to similar trend growths in both persistent and transitory earnings differentials between 1982 and 2005.
    Keywords: Permanent inequality; Earnings instability; Life-cycle earnings; Schooling
    JEL: C33 D31 J39
    Date: 2008–12–05
  6. By: David, DE LA CROIX (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: We propose four arguments favoring the idea that medical effectiveness, adult longevity and height started to increase in Europe before the industrial revolution. This may have prompted households to increase their investment in human skills as a response to longer lives and initiated the transition from stagnation to growth.
    Keywords: Life Expectancy, Height, Industrial Revolution, Human Capital, Adult Mortality
    JEL: J11 I12 N30 I20 J24
    Date: 2008–12–02
  7. By: Donata Bessey (Institute for Strategy and Business Economics, University of Zurich); Uschi Backes-Gellner (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: Previous research on educational decisions has almost exclusively focused on individual decisions to start a particular education. At the same time, the decision to revise an educational choice has hardly been analyzed, unless it is the decision to drop out. However, dropping out is only one possibility of revising an educational choice. In this paper, we distinguish three different educational revisions, namely, dropping out, changing and upgrading. We analyze the determinants of these three different choices in apprenticeship training using hazard rate models for the empirical analysis. In a first research step, we carry out a simple hazard rate estimation of the decision to drop out vs. staying in the educational system because dropping out is associated with considerable risks, unlike the other two choices. Our most important finding here is that dropout decisions seem to be driven to a considerable amount by financial considerations such as the opportunity cost of apprenticeship training or financial distress, determinants that could rarely be analyzed in previous research due to lack of information. In a competing risks specification of the different educational choices, we find additional regional-level impact factors and remarkable differences in the determinants of the different choices. Less favorable local labor market conditions lead to lower hazards of staying within the educational system. These results underline the importance of distinguishing between the different choices instead of focusing exclusively on dropping out as one possible choice.
    Keywords: Apprenticeship training, human capital, regional labor markets
    JEL: J I J
    Date: 2008–12
  8. By: Bodor , Andras; Robalino, David; Rutkowski, Michal
    Abstract: Mandatory pension systems can have a negative impact on individual savings and labor supply decisions. In particular, defined benefit pension schemes that are not actuarially fair, can create incentives for early retirement, and therefore, reduce labor supply and the stock of human capital. After a review of frequently applied approaches to assess the incentives generated by a pension system, the paper develops an indicator to predict the age-specific retirement probabilities induced by a particular pension system given heterogeneous individual preferences. The paper then describes how this indicator could be used to project the size of the labor force by gender, age and skill level, and correspondingly, the dynamics of human capital accumulation. Finally, the paper develops a set of life-cycle income measures to assess how the pension system affects decisions regarding the supply of labor in the public and private sectors. The methods are illustrated in the case of Morocco.
    Keywords: life cycle models; labor supply; human capital; retirement policies; job and occupational mobility
    JEL: J62 J22 D91 J24 J26
    Date: 2008
  9. By: Brian Jacob; Jens Ludwig
    Abstract: This review paper, prepared for the forthcoming Russell Sage volume Changing Poverty, considers the ability of different education policies to improve the learning outcomes of low-income children in America. Disagreements on this question stem in part from different beliefs about the problems with our nation's public schools. In our view there is some empirical support for each of the general concerns that have been raised about public schools serving high-poverty student populations, including: the need for more funding for those school inputs where additional spending is likely to pass a benefit-cost test; limited capacity of many schools to substantially improve student learning by improving the quality of instruction on their own; and the need for improved incentives for both teachers and students, and for additional operational flexibility. Evidence suggests that the most productive changes to existing education policies are likely to come from increased investments in early childhood education for poor children, improving the design of the federal No Child Left Behind accountability system, providing educators with incentives to adopt practices with a compelling research base while expanding efforts to develop and identify effective instructional regimes, and continued support and evaluation of a variety of public school choice options.
    JEL: I20
    Date: 2008–12
  10. By: Nadège Marchand (GATE, University of Lyon, CNRS, ENS-LSH, Centre Léon Bérard, France); Claude Montmarquette (University of Montreal and CIRANO)
    Abstract: Our study considers the question of training in firms using an experimental laboratory approach. We investigate the following questions : What conditions, excluding external certification, will bring workers and employers to cooperate and share a rent generated by the workers’ training? What conditions will induce workers to accept the training offer, for employers to initially offer the training and to reward the trained workers in the last stage of the game? We analyse the impact of the size of the rent created by training and the existence of an information system on employer reputation rewarding trained employees. Reputation does matter to induce cooperation, but in the absence of external institutions, coordination on the optimal outcome remains difficult.
    Keywords: general and speficic trainings in firms, accreditation, cooperation and reputation, experimental econonmics
    JEL: C91 I
    Date: 2008
  11. By: Yongmin Chen; Ignatius J. Horstmann; James R. Markusen
    Abstract: There exist two approaches in the literature concerning the multinational firm's mode choice for foreign production between an owned subsidiary and a licensing contract. One approach considers environments where the firm is transferring primarily knowledge-based assets. An important assumption there is that the relevant knowledge is absorbed by the local manager or licensee over the course of time: knowledge is non-excludable. More recently, a number of influential papers have adopted a property-right view of the firm, assuming the application abroad of physical capital, the owner of which retains full and exclusive rights to the capital should a relationship break down. In this paper we combine both forms of capital assets in a single model. The model predicts that foreign direct investment (owned subsidiaries) is more likely than licensing when the ratio of knowledge capital to physical capital is high, or when market value is high relative to the book value of capital (high Tobin's-Q).
    JEL: F2 F23 L2 L22 L24
    Date: 2008–12

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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