nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒01‒03
eleven papers chosen by
Fabio Sabatini
University of Siena

  1. Estimating Complementarity between Education and Training By Belzil, Christian; Hansen, Jörgen; Kristensen, Nicolai
  2. A Note on Measures of Human Capital for Immigrants: Examining the American Community Survey and New Immigrant Survey By Akee, Randall K. Q.; Yuksel, Mutlu
  3. How Large are Learning Externalities? Measurement by Calibration By Seung Mo Choi
  4. Welfare implications of public education spending rules By Konstantinos Angelopoulos; Jim Malley; Apostolis Philippopoulos
  5. Education and Early Career Outcomes of Second-Generation Immigrants in France By Belzil, Christian; Poinas, François
  6. Did the Great Depression affect Educational Attainment in the US? By Kisswani, Khalid
  7. Tax Policy and Returns to Education By Alison L. Booth; Melvyn B. Coles
  8. Education, Training and Economic Performance: Evidence from Establishment Survival Data By William Collier; Francis Green; Young-Bae Kim; John Peirson
  9. Skill Diffusion by Temporary Migration? Returns to Western European Work Experience in Central and East European Countries By Anna Iara
  10. FDI, the Brain Drain and Trade: Channels and Evidence By Artjoms Ivlevs; Jaime de Melo
  11. Trade Openness and the Demand for Skills: Evidence from Turkish Microdata By Meschi, Elena; Taymaz, Erol; Vivarelli, Marco

  1. By: Belzil, Christian (Ecole Polytechnique, Paris); Hansen, Jörgen (Concordia University); Kristensen, Nicolai (Aarhus School of Business)
    Abstract: In this paper, we formulate and estimate a structural model of post-schooling training that explicitly allows for possible complementarity between initial schooling levels and returns to training. Precisely, the wage outcome equation depends on accumulated schooling and on the incidence of training. The effect of training on wage growth depends on individual permanent endowments as well as on education. We find evidence of statistically significant complementarity, i.e. the higher educated receive the highest return to the MBA-type training considered here.
    Keywords: dynamic programming, dynamic treatment effects, skill complementarity, random coefficients
    JEL: I2 J2 J3
    Date: 2008–12
  2. By: Akee, Randall K. Q. (IZA); Yuksel, Mutlu (IZA)
    Abstract: In this paper we examine whether where one acquires their human capital matters in earnings regressions. We focus on a nationally-representative US data set and find that there is little difference between a measure of total years of education and measures for US and foreign-based years of education. There is a large difference, however, in where total experience is acquired: US-based experience commands a higher return to wages and is statistically highly significant. The measures used in this analysis must be inferred based on the year of migration to the US. Using an immigrant-specific data set, the New Immigrant Survey which contains explicit information on the human capital acquired in the US and abroad, we confirm these results.
    Keywords: immigrants, schooling, rates of return
    JEL: I21 J24 J61
    Date: 2008–12
  3. By: Seung Mo Choi (School of Economic Sciences, Washington State University)
    Abstract: Quantitative features on human capital externalities are not fully understood. This paper measures the social returns on human capital that arise from learning externalities, through the calibration of a growth model. The calibration uses an equilibrium condition that equates private returns on physical capital and on human capital. Results suggest that learning externalities contribute substantially to human capital production. In a benchmark model, the social value of human capital is about 37% higher than the private value. The social rate of return on human capital is 2 to 4% points higher than the private rate of return, 8%.
    Keywords: Growth, Human Capital, Learning Externalities
    JEL: J24 O41
    Date: 2008–11
  4. By: Konstantinos Angelopoulos; Jim Malley; Apostolis Philippopoulos
    Abstract: In this paper, we quantitatively assess the welfare implications of alternative public education spending rules. To this end, we employ a dynamic stochastic general equilibrium model in which human capital externalities and public education expenditures, financed by distort- ing taxes, enhance the productivity of private education choices. We allow public education spending, as share of output, to respond to various aggregate indicators in an attempt to minimize the market imperfection due to human capital externalities. We also expose the economy to varying degrees of uncertainty via changes in the variance of total factor productivity shocks. Our results indicate that, in the face of increasing aggregate uncertainty, active policy can signi.cantly outperform passive policy (i.e. maintaining a constant public educa- tion to output ratio) but only when the policy instrument is successful in smoothing the growth rate of human capital.
    Date: 2008–12
  5. By: Belzil, Christian (Ecole Polytechnique, Paris); Poinas, François (CNRS, GATE)
    Abstract: We estimate a flexible dynamic model of education choices and early career employment outcomes of the French population. Individuals are allowed to choose between 4 options: continue to the next grade, accept a permanent contract, accept a temporary contract, or withdraw from the labor force (a residual state). Our analysis focuses on the comparison between French Second-Generation Immigrants whose parents are born in Africa and French-natives. We find that schooling attainments explain around two thirds of the differences in access to early career employment stability. However, one third cannot be linked to observed investment in human capital.
    Keywords: schooling attainments, second-generation immigrants, fixed term employment
    JEL: I2 J15 J24 J41
    Date: 2008–12
  6. By: Kisswani, Khalid
    Abstract: The Great Depression is a prime example of a macroeconomic crisis that produced adverse economic and social effects in all spheres of life. The theoretical arguments about the real effects of the Great Depression on education vary. The first is that of economic hardships, which might force individuals eligible to go to school to work for their sustenance. The second argument is that high unemployment would reduce the opportunity cost of going to school, making going to school the best other viable alternative. Following these theoretical notions, this paper explores the impact of the Great Depression on education, on race (whites and blacks) and gender (males and females), during the period from 1930 to 1940. Furthermore, this paper examines the effects of state employment indices on the average education (at the mean). The results (using individual census data from 1960) show some evidence that the Great Depression affected education of whites born between 1911 and 1915. However, the results show no evidence that the variation in state employment indices affected the decision of schooling on the average (mean), but it affected the education of white males at the top of the distribution (90% percentile).
    Keywords: Great Depression; education; employment indices
    JEL: I21 I23 J24
    Date: 2008–12–19
  7. By: Alison L. Booth; Melvyn B. Coles
    Abstract: This paper considers how asymmetric tax treatment, where labour market earnings are taxed but household production is untaxed, aspects educational choice and labour supply. We show that taxes on labour market earnings can generate a large (non-marginal) switch to home production and the ensuing deadweight losses are large. Using a cross-country panel, we find that gender differences in labour supply responses to tax policy can explain differences in aggregate labour supply and years of education across countries.
    Keywords: Increasing returns; tax policy; gender; labour supply; education
    JEL: H24 H3 J22 J24 J31
    Date: 2008–12
  8. By: William Collier; Francis Green; Young-Bae Kim; John Peirson
    Abstract: This paper analyses the savings behaviour of natives and immigrants in Germany. It is argued that uncertainty about future income and legal status (in case of immigrants) is a key component in the determination of the level of precautionary savings. Using the German dataset, we exploit a natural experiment arising from a change in the nationality law in Germany to estimate the importance of precautionary savings. Using difference-in-differences approach, we find a significant reduction in savings and remittances for immigrants after the easing of citizenship requirements, compared to the pre-reform period. Our parametric specification shows that introduction of the new nationality law reduces the marginal propensity to save gap between natives and immigrants by up to 80%. These findings suggest that much of the differences in terms of the savings behaviour between natives and immigrants are driven by the savings arising from the uncertainties about future income and legal status rather than cultural differences.
    Keywords: Training; Education; Human capital; Profit, Skill
    JEL: J24 J1 L21
    Date: 2008–12
  9. By: Anna Iara (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper contributes to the debate on the effects of migration by providing evidence on the returns to working experience from western Europe in eastern European labour markets. In particular, using the 2003 Youth Central and Eastern Eurobarometer dataset, we test the hypothesis that there are differential returns to foreign as opposed to domestic work experience. Our analysis combines the Mincer wage equation framework and the Roy model of migration. The latter suggests that migration responds to net expected benefits. Hence, return migration is endogenous with respect to differential returns to foreign working experience. To allow for selectivity on observable or unobservable characteristics, we estimate an endogenous switching model in two steps. This procedure combines probit estimates of propensities to work and to acquire foreign work expericence respectively, and OLS estimates of earnings equations for stayers and movers, with the inclusion of nonselection hazards obtained in the first step. The expected wage increase is the difference between post-return migrants' wages and wages under similar conditions in the absence of migration. For any individual, only one of these measures can be observed. We impute the respective counterfactuals from the separate wage regressions. Our analysis shows that movers and stayers are rewarded for different human capital characteristics. We find an average earnings premium for foreign work experience of around 30%. This can be seen as partial evidence for international skill diffusion: temporary migrants may upgrade their skills by learning on the job in countries with higher technological development, and subsequently bring human capital to their source country, thus adding to know-how diffusion and the catching-up of their economy. We perform additional empirical analyses to support this interpretation: we show that the premium found for return migration does not primarily reward the language proficiencies of returning migrants, and we further provide indicative evidence that no earnings premium is obtained for work-related stays abroad in other central and eastern European transition countries.
    Keywords: Central and Eastern Europe, return migration, wage premium, skill diffusion
    JEL: J31 J61 O15
    Date: 2008–07
  10. By: Artjoms Ivlevs (University of Nottingham); Jaime de Melo (University of Geneva, CERDI and CEPR)
    Abstract: This paper explores the links between the patterns of migration (high vs. low-skill), trade policy, and foreign direct investment (FDI) from the standpoint of sending countries. A skeleton general equilibrium model with a non-traded good and sector-specific labour is used to explore the effects of the skill-composition of exports on FDI. The model suggests that if exports are low-skill intensive, emigration of high- skill labour leads to positive FDI, suggesting that migration and FDI are complements. Cross-sectional analysis using FDI and emigration data for 103 migration-sending countries over the period 1990-2000 finds some support for this conjecture.
    Keywords: Migration, FDI, Brain Drain
    JEL: F22 F13 F16
    Date: 2008–10–27
  11. By: Meschi, Elena (Università Politecnica delle Marche, Ancona); Taymaz, Erol (Middle East Technical University); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: In this paper we report evidence on the relationship between trade openness, technology adoption and relative demand for skilled labour in the Turkish manufacturing sector, using firm-level data over the period 1980-2001. In a dynamic panel data setting using a unique database of 17,462 firms, we estimate an augmented cost share equation whereby the wage bill share of skilled workers in a given firm is related to international exposure and technology adoption. Overall, results suggest that trade openness and technology play a key role in shifting the demand for labour towards more skilled workers within each firm. Technology-related variables (domestic R&D expenditures and technological transfer from abroad) are positive and significantly related to skill upgrading, as are the involvement of foreign capital in a firm's ownership and the propensity to export. Moreover, firms belonging to those sectors that most raised their imported inputs also experienced a higher increase in the labour cost share of skilled workers. This finding is consistent with the idea that imports by a middle-income country imply a transfer of new technologies that are more skill-intensive than those previously in use in domestic markets. This idea is reinforced by the finding that only imported inputs from industrialised countries − where the potential for innovation diffusion comes from - enter the estimated regression significantly.
    Keywords: globalisation, skills, skill-biased technological change, technology transfer, GMM-SYS
    JEL: F16 O15 O33
    Date: 2008–12

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