nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒02‒07
nine papers chosen by
Fabio Sabatini
University of Siena

  1. Schooling, Production Structure and Growth: An Empirical Analysis on Italian Regions By Carina Hirsch; Giovanni Sulis
  2. Total factor productivity, intangible assets and spatial dependence in the European regions By Barbara Dettori; Emanuela Marrocu; Raffaele Paci
  3. Remittances and economic growth in Latin America and the Caribbean: The Impact of the human capital development By Garcia-Fuentes, Pablo A.; Kennedy, P. Lynn
  4. Unobserved Worker Ability, Firm Heterogeneity, and the Returns to Schooling and Training By Ana Sofia Lopes; Paulino Teixeira
  5. Schooling and Political Participation in a Neoclassical Framework: Theory and Evidence By Campante, Filipe R.; Chor, Davin
  6. Prospects for Skills-Based Export Growth in a Labour-Abundant, Resource-Rich Economy: Indonesia in Comparative Perspective By Coxhead, Ian; Li, Muqun
  7. An Intra-Firm Perspective on Wage Profiles and Employment of Older Workers with Special Reference to Human Capital and Deferred Compensation By Pfeifer, Christian
  8. International Migration, Transfers of Norms and Home Country Fertility By Michel, BEINE; FrŽdŽric, DOCQUIER; Maurice, SCHIFF
  9. A Perceived Human Development Index By Neri, Marcelo

  1. By: Carina Hirsch; Giovanni Sulis
    Abstract: This paper analyses the growth effects of high levels of human capital at the industry level. By favouring technology adoption, human-capital-intensive industries grow faster compared to less human-capital-intensive industries in economies that have higher levels of human capital. Using data for nine macro sectors of manufacturing industries in the twenty Italian regions, the results show positive and significant effects of human capital levels and accumulation on value added growth. This result is robust to a series of sensitivity checks such as measures of productivity growth and different indicators of human capital. This finding is particularly important for Italy, as it has always had a model of industrial specialization focused on the traditional sectors which have a low content of technology and human capital.
    Keywords: Growth, Human Capital, Technology Adoption, Regions, Sectors, Italy.
    JEL: O47 R11
    Date: 2008
  2. By: Barbara Dettori; Emanuela Marrocu; Raffaele Paci
    Abstract: In the last decade there has been an upsurge of studies on international comparisons of Total Factor Productivity (TFP). The empirical evidence suggests that countries and regions differ not only in traditional factor endowments (labour and physical capital) but mainly in productivity and technology. Therefore, a crucial issue is the analysis of the determinants of such differences in the efficiency levels across economies. In this paper we try to assess these issues by pursuing a twofold aim. First, we derive a regression based measure of regional TFP which have the nice advantage of not imposing a priori restrictions on the inputs elasticities; this is done by estimating a Cobb-Douglas production function relationship for 199 European regions over the period 1985-2006, which includes the traditional inputs as well as a measure of spatial interdependences across regions. Secondly, we investigate the determinants of the TFP levels by analyzing the role played by intangible factors: human capital, social capital and technological capital. It turns out that a large part of TFP differences across the European regions are explained by the disparities in the endowments of such assets. This outcome indicates the importance of policy strategies which aim at increasing the level of knowledge and social capital as stressed by the Lisbon agenda.
    Keywords: Total factor productivity; human capital; social capital; technology; Europe.
    JEL: R11 O47 O52 C31
    Date: 2008
  3. By: Garcia-Fuentes, Pablo A.; Kennedy, P. Lynn
    Abstract: Remittances are one source of external financing for developing countries that have been increasing in both size and importance as of late. However, the issue about the impact on economic growth from remittances is still opened for discussion. This paper adds to this discussion by investigating the impact of remittances on growth through human capital using a panel data analysis for a sample of 14 Latin American and Caribbean (LAC) countries during the period 1975-2000. The results indicate that remittances have a positive impact on economic growth in the representative countries from the LAC region; however, the realization of this impact holds only when the remittance receiving country has a minimum threshold of human capital stock.
    Keywords: Remittances, Human Capital, Growth, Latin America and the Caribbean, International Development, International Relations/Trade, Labor and Human Capital,
    Date: 2009
  4. By: Ana Sofia Lopes (Departamento de Gestão e Economia, ESTG/Instituto Politécnico de Leiria (Portugal)); Paulino Teixeira (GEMF/Faculdade de Economia, Universidade de Coimbra (Portugal))
    Abstract: It is well known that unobserved heterogeneity across workers and firms seriously impacts the computation of the determinants of individual earnings in standard human capital earnings functions. Following the tradition of AKM (Abowd, Kramarz, and Margolis, 1999), this paper offers an alternative way of controlling unknown worker and firm heterogeneity by taking full advantage of a matched employee-employer dataset based on two key Portuguese micro databases. Our modelling strategy assumes that the gap between individual and firm average wages, unexplained by differences in observable characteristics, gives the extent to which the unobserved ability of a given individual deviates from the unobserved worker average ability in the firm. This methodology has, in particular, the advantage of not relying exclusively on information on job switchers to identify worker and firm effects, thus avoiding any bias arising from endogenous worker mobility. Another important aspect of our treatment is that it allows the estimation of worker effects without risk of contamination from firm effects. To test our modelling we use an original 2-year longitudinal LEED dataset, comprising of more than 400 thousand workers and 1,500 firms in each year. We focus on two separate sets of individuals (i.e. stayers and switchers) and provide a variety of robustness tests, including replication of the original AKM methodology. After controlling worker and firm effects, our results show that the acquisition of schooling, labor market experience, and training, inter al., pays off. Moreover, we do find evidence of a large bias in standard OLS return rates to typical covariates. Evidence from Monte Carlo simulation and bootstrapping also shows that our estimated rates of return to human capital do not seem to be sensitive to changes in various assumptions. Our study does provide therefore further evidence that a wide set of individual and firm characteristics is crucial to understanding the true role of human capital variables in labor markets.
    Keywords: Human Capital, Unobserved Heterogeneity, Earnings, LEED
    JEL: J24 J31 C23 C81
    Date: 2009–03
  5. By: Campante, Filipe R. (Harvard U); Chor, Davin (Singapore Management U)
    Abstract: We investigate how the link between individual schooling and political participation is affected by country characteristics. We introduce a focus on a set of variables--namely factor endowments--which influence the relative productivity of human capital in political versus production activities. Using micro data on individual behavior, we find that political participation is more responsive to schooling in land-abundant countries, and less responsive in human capital-abundant countries, even while controlling for country political institutions and cultural attitudes. We develop these ideas in a model where individuals face an allocation decision over the use of their human capital. A relative abundance of land (used primarily in the least skill-intensive sector) or a scarcity of aggregate human capital will increase both the level of political participation and its responsiveness to schooling, by lowering the opportunity cost of production income foregone. In an extension, we further consider the problem of how much schooling a utility-maximizing ruler would choose to provide. An abundance of land tends to increase political participation ex post, and hence will lead the ruler to discourage human capital accumulation, a prediction for which we find broad support in the cross-country data. Our model thus offers a framework which jointly explains patterns of political participation at the individual level and differences in public investment in education at the country level.
    JEL: D72 D78 I20 I21 O15
    Date: 2008–09
  6. By: Coxhead, Ian (U of Wisconsin and Norwegian University of Life Sciences); Li, Muqun (U of Wisconsin)
    Abstract: In an integrated global economy, specialisation in trade is an increasingly prominent strategy. A labour-abundant, resource-rich economy like Indonesia faces stiff competition for labourintensive manufactures; meanwhile, rapid growth in demand for resources from China and India exposes it to the ‘curse’ of resource wealth. This diminishes prospects for more diversified growth based on renewable resources like human capital. Using an international panel data set we explore the influence of resource wealth, foreign direct investment, and human capital on the share of skill-intensive products in total exports. FDI and human capital increase this share; resource wealth diminishes it. We use the results to compare Indonesia with Thailand and Malaysia. Indonesia’s reliance on skill-intensive exports would have been higher had it achieved higher levels of FDI and skills. Indonesia’s performance in accumulating these endowments, and its relative resource abundance, impede diversification in production and trade. Finally, we discuss policy lessons and options.
    JEL: F14
    Date: 2008–04
  7. By: Pfeifer, Christian
    Abstract: Human capital and deferred compensation might explain why firms employ but do not hire older workers. Adjustments of wage-tenure profiles for older new entrants are explored in the context of deferred compensation. From an equity theory perspective, such adjustments might lead to adverse incentive effects so that firms prefer to hire rather homogenous workers in terms of entry age. A personnel data set is analyzed which reveals that at least for white-collar workers entry age has a positive effect on entry wages and wage-tenure profiles are adjusted according to entry age.
    Keywords: deferred compensation, human capital, internal labor markets, older workers, wages
    JEL: J14 J24 J31 J33 M51 M52
    Date: 2009–02
  8. By: Michel, BEINE; FrŽdŽric, DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Maurice, SCHIFF
    Abstract: This paper examines the relationship between international migration and source country fertility. The impact of international migration on source country fertility may have a number of causes, including a transfer of destination countriesÕ fertility norms and an incentive to acquire more education. We provide a rigorous test of the diffusion of fertility norms using original and detailed data on migration. Our results provide evidence of a strong transfer of fertility norms from migrants to their country of origin.
    Keywords: International migration; endogenous fertility; human capital; social norms
    JEL: J13 J61 O11
    Date: 2008–12–15
  9. By: Neri, Marcelo
    Abstract: The objective of the paper is to build a Perceived Human Development Index (PHDI) framework by assembling the HDI components, namely indicators on income, health and education on their subjective version. We propose here to introduce a fourth dimension linked to perceptions on work conditions, given its role in the “happiness†literature and in social policy making. We study how perceptions on satisfaction about the individual’s satisfaction with income, education, work and health are related to their objective counterparts. We use a sample of LAC countries where we take advantage of a larger set of questions on the four groups of social variables mentioned included in the Gallup World Poll by the IADB. We emphasize the impacts of objective income and age on perceptions. Complementarily, in the appendix we use the full sample of 132 countries where a smaller set of variables can be included, which provides a greater degree of freedom to study the impact of objective HDI components observed at country level on the formation of individual’s perception on income, education, work, health and life satisfaction. These exercises provide useful insights about the workings of beneficiaries’ point of view to understand the transmission mechanism of key social policy ingredients into perceptions. In particular, the so-called PHDI may provide a complementary subjective reference to the HDI. We also study how one’s satisfaction with life is established, measuring the relative importance given to income vis-à-vis health and education. Estimating these “instantaneous happiness functions†will help to assess the relative weights attributed to income, health and education in the HDI, which is a benchmark in the multidimensional social indicators toolbox used in practice.
    Date: 2008–12–29

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.
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