nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒01‒17
nine papers chosen by
Fabio Sabatini
University of Siena

  1. Schools, Skills, and Synapses By James J. Heckman
  2. Wages and Human Capital in the U.S. Financial Industry: 1909-2006 By Thomas Philippon; Ariell Reshef
  3. Immigrant earnings in the Italian labour market By Antonio Accetturo; Luigi Infante
  4. Measuring growth of labour quality and the quality-adjusted unemployment rate in Switzerland By Bolli, Thomas; Zurlinden, Mathias
  5. Identity and educational choice: a behavioral approach By Yuemei JI
  6. Education in Eritrea: Developmental Challenges By Rena, Ravinder
  7. Does household expenditure on education in India depend upon the returns to education? By Uma Kambhampati
  8. Peer Effects and Social Networks in Education By Antoni Calvó-Armengol; Eleonora Patacchini; Yves Zenou
  9. University ranking according to occupational outcome By Francesca De Battisti; Giovanna Nicolini; Silvia Salini

  1. By: James J. Heckman (University of Chicago)
    Abstract: This paper discusses (a) the role of cognitive and noncognitive ability in shaping adult outcomes, (b) the early emergence of differentials in abilities between children of advantaged families and children of disadvantaged families, (c) the role of families in creating these abilities, (d) adverse trends in American families, and (e) the effective- ness of early interventions in offsetting these trends. Practical issues in the design and implementation of early childhood programs are discussed.
    Keywords: productivity, high school dropout, ability gaps, family influence, noncognitive skills, early interventions
    Date: 2008–12–15
  2. By: Thomas Philippon; Ariell Reshef
    Abstract: We use detailed information about wages, education and occupations to shed light on the evolution of the U.S. financial sector over the past century. We uncover a set of new, interrelated stylized facts: financial jobs were relatively skill intensive, complex, and highly paid until the 1930s and after the 1980s, but not in the interim period. We investigate the determinants of this evolution and find that financial deregulation and corporate activities linked to IPOs and credit risk increase the demand for skills in financial jobs. Computers and information technology play a more limited role. Our analysis also shows that wages in finance were excessively high around 1930 and from the mid 1990s until 2006. For the recent period we estimate that rents accounted for 30% to 50% of the wage differential between the financial sector and the rest of the private sector.
    JEL: G2 J2 J24 J3 O3 O32 O33 O51
    Date: 2009–01
  3. By: Antonio Accetturo (Bank of Italy, Milan Branch); Luigi Infante (Bank of Italy, Economic and Financial Statistics Department)
    Abstract: The aim of this paper is to assess the relationship between individual skills and labour market performance of immigrants residing in Lombardy during the period 2001-2005. We use a recent dataset collected by the NGO ISMU, which includes information on individual characteristics and the legal status of each immigrant. Our results show that returns on schooling are positive and range from 0.8 per cent to 0.9 per cent, a figure that is much lower than the one estimated for native Italians. This result is robust to a number of specifications and tests. In particular, it is not influenced by the legal status of the alien or by a possible self-selection in the labour supply. Moreover, although more talented immigrants tend to self-select in the Lombardy region compared with the other Italian regions, their return on schooling remains low compared with natives. We also show that a certain heterogeneity exists across educational levels and countries of origin: immigrants from Eastern Europe are better able to exploit their human capital, especially when they hold a university degree, while the school-wage profile of Latin Americans and Asians is basically flat. Finally, there is some evidence of a cohort effect in migration, but this tends to impact on the return on experience rather than on the return on schooling.
    Keywords: Immigration, return on schooling, return on experience
    JEL: J31 O15
    Date: 2008–12
  4. By: Bolli, Thomas (Swiss National Bank); Zurlinden, Mathias (Swiss National Bank)
    Abstract: This paper presents results on human capital accumulation for the Swiss economy. We find that the index of labour quality has grown at a rate of 0.5% per year from 1991 to 2006. The main sources are the growth in average levels of education and the passing of the baby boom cohort through the age structure of the workforce. Projections over the period 2006-2050 suggest that labour quality growth will slow down with time. We also calculate a quality-adjusted unemployment rate and find that the unemployment rate is reduced by about 0.3 pp when human capital accumulation is taken into account.
    Keywords: human capital; labour quality; unemployment rate
    JEL: E24 J24 J31
    Date: 2008–04–01
  5. By: Yuemei JI
    Abstract: It is puzzling that socioeconomic background greatly affects educational choice. Distinguished from the explanations based on expected utility theory, this paper attempts to explore the psychological mechanisms of generating educational identity1 and schooling choice. It offers a self-signaling model where (1) it incorporates self-esteem concerns into the agent’s payoff function, (2) the investment in schooling not only signals her cognitive ability but also brings the agent into cognitive dissonance and reduction when the perceptions of ability are time-dependent. Using this model, I show a more discriminating analysis of educational choice which combines multi-dimensional factors including socioeconomic background, cognitive and non-cognitive abilities. I identify the conditions under which the high ability agent fails to invest in education. The quality of school and the preschooling are key variables. The model suggests that public policy can help poor children by improving both the early and later education quality at school.
    Keywords: identity, educational choice, poverty
    JEL: D81 I30
    Date: 2008–11
  6. By: Rena, Ravinder
    Abstract: The ongoing national reconstruction process of Eritrea is centered on educational reformation. The government of Eritrea placed educational policy on top priority for national development which demands the emergence of new class of trained youth blended with disciplined minds and skills instead of raw graduation. It had established about eight colleges at tertiary level within a short span of time to build human resource required for the present and future. In line with this, it laid down new policies and curricula suit to the immediate national scenario. This article analyzed the strengths and weaknesses of the educational policies, planning and the infrastructure requirements to meet the intended goal. It explored and analyzed Eritrean educational development and its key challenges. It also provided some useful insights for policy development. The data for the study were mainly collected from the reports of Ministry of Education and other colleges in Eritrea. The outcome of the educational reformation is expected to have a profound effect in the development of the country.
    Keywords: Education; Eritrea; Human capital and Economic development; Economic growth; Gender inequality.
    JEL: A22 I21 I23 I28 I22
    Date: 2008–03
  7. By: Uma Kambhampati (Department of Economics, University of Reading)
    Abstract: This paper analyses whether the amount households spend on education depends upon the returns to education prevalent in the region in which they live. To this end, we estimated rates of return to education separately for boys and girls in 33 states and UTs in India. These rates of return were then included in our education expenditure model. Our results clearly indicated that the rate of return to education was highly significant in increasing the amount spent on education by the household both for boys and girls. However, we find that the impact of this variable is much larger at secondary level and for girls.
    Keywords: Education, Returns to education, India, household expenditure.
    JEL: I21 I22 R22
    Date: 2008
  8. By: Antoni Calvó-Armengol; Eleonora Patacchini; Yves Zenou (Universitat Autònoma de Barcelona,Università di Roma “La Sapienza”, Stockholm University, IFN, GAINS, and CREAM)
    Abstract: This paper studies whether structural properties of friendship networks affect individual outcomes in education. We first develop a model that shows that, at the Nash equilibrium, the outcome of each individual embedded in a network is proportional to her Katz-Bonacich centrality measure. This measure takes into account both direct and indirect friends of each individual but puts less weight to her distant friends. We then bring the model to the data by using a very detailed dataset of adolescent friendship networks. We show that, after controlling for observable individual characteristics and unobservable network specific factors, the individual’s position in a network (as measured by her Katz-Bonacich centrality) is a key determinant of her level of activity. A standard deviation increase in the Katz- Bonacich centrality increases the pupil school performance by more than 7 percent of one standard deviation.
    Date: 2008–11
  9. By: Francesca De Battisti (Department of Economics, Business and Statistics - University of Milan); Giovanna Nicolini (Department of Economics, Business and Statistics - University of Milan); Silvia Salini (Department of Economics, Business and Statistics - University of Milan)
    Abstract: We suggest that the "occupational outcome" of graduates should be considered as an additional dimension in the ranking of Academic Institutions and their Faculties. We measure the occupational outcome through the ISTAT graduate employment national survey. We make an exercise on Humanities Faculties showing that we can consider one dimension as occupational outcome or we can split up the latter into two dimensions as "cultural capital" and "social class". We show how the ranking of Italian Universities, made by the Censis-La Repubblica, changes when accounting for this new dimension into the three instances we propose.
    Keywords: Education, Employment, Rating,
    Date: 2008–11–13

This nep-hrm issue is ©2009 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.