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on Human Capital and Human Resource Management |
| By: | Belley, Phillippe; Lochner, Lance |
| Abstract: | This paper uses data from the 1979 and 1997 National Longitudinal Survey of Youth cohorts(NLSY79 and NLSY97) to estimate changes in the effects of ability and family income on educational attainment for youth in their late teens during the early 1980s and early 2000s. Cognitive ability plays an important role in determining educational outcomes for both NLSY cohorts, while family income plays little role in determining high school completion in either cohort. Most interestingly, we document a dramatic increase in the effects of family income on college attendance (particularly among the least able) from the NLSY79 to the NLSY97. Family income has also become a much more important determinant of college `quality' and hours/weeks worked during the academic year (the latter among the most able) in the NLSY97. Family income has little effect on college delay in either sample. To interpret our empirical findings on college attendance, we develop an educational choice model that incorporates both borrowing constraints and a `consumption' value of schooling – two of the most commonly invoked explanations for a positive family income - schooling relationship. Without borrowing constraints, the model cannot explain the rising effects of family income on college attendance in response to the sharply rising costs and returns to college experienced from the early 1980s to early 2000s: the incentives created by a 'consumption' value of schooling imply that income should have become less important over time (or even negatively related to attendance). Instead, the data are more broadly consistent with the hypothesis that more youth are borrowing constrained today than were in the early 1980s. |
| Keywords: | Ability, Achievement, Borrowing Constraints, College, Credit Constraints, Family Income, High School |
| JEL: | I21 I22 I28 J24 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-9&r=hrm |
| By: | Luca Marchiori (IRES, Université catholique de Louvain); Patrice Pieretti (CREA, Université du Luxembourg); Benteng Zou (CREA, Université du Luxembourg) |
| Abstract: | How do high and low skilled migration affect fertility and human capital in migrants’ origin countries? This question is analyzed within an overlapping generations model where parents choose the number of high and low skilled children they would like to have. Individuals migrate with a certain probability and remit to their parents. It is shown that a brain drain induces parents to have more high and less low educated children. Under certain conditions fertility may either rise or decline due to a brain drain. Low skilled emigration leads to reversed results, while the overall impact on human capital of either type of migration remains ambiguous. Subsequently, the model is calibrated on a developing economy. It is found that increased high skilled emigration reduces fertility and fosters human capital accumulation, while low skilled emigration induces higher population growth and a lower level of education. |
| Keywords: | migration, human capital, fertility |
| JEL: | F22 J13 J24 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:409&r=hrm |
| By: | Nordin, Martin (Department of Economics, Lund University); Persson, Inga (Department of Economics, Lund University); Rooth, Dan-Olof (Department of Economics, Lund University) |
| Abstract: | This paper adds to the small literature on the consequences of education-occupation mismatches. It examines the income penalty for field of education – occupation mismatches for men and women with higher education in Sweden and reveals that the penalty for such mismatches is large for both men and women. In fact, it is substantially larger than has been found for the US. Controlling for cognitive ability further establishes that the income penalty is not caused by a sorting by ability, at least for Swedish men. The income penalty for men decreases with work experience which is an indication that education-specific skills and work experience are substitutes to some extent. There is no evidence, though, that the mismatched individuals move to a matching occupation over time. Thus, for some, the income penalty seems to be permanent. |
| Keywords: | Human capital; rate of return; salary wage differentials; educational economics |
| JEL: | I21 J24 J31 |
| Date: | 2009–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2009_001&r=hrm |
| By: | Luca Marchiori (IRES, Université catholique de Louvain); Patrice Pieretti (CREA, Université du Luxembourg); Benteng Zou (CREA, Université du Luxembourg) |
| Abstract: | How do high and low skilled migration affect fertility and human capital in migrants’ origin countries? This question is analyzed within an overlapping generations model where parents choose the number of high and low skilled children they would like to have. Individuals migrate with a certain probability and remit to their parents. It is shown that a brain drain induces parents to have more high and less low educated children. Under certain conditions fertility may either rise or decline due to a brain drain. Low skilled emigration leads to reversed results, while the overall impact on human capital of either type of migration remains ambiguous. Subsequently, the model is calibrated on a developing economy. It is found that increased high skilled emigration reduces fertility and fosters human capital accumulation, while low skilled emigration induces higher population growth and a lower level of education. |
| Keywords: | Skilled emigration, remittances, fertility, human capital |
| JEL: | F22 F24 J13 J24 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:408&r=hrm |
| By: | Boudarbat, Brahim; Lemieux, Thomas; Riddell, W. Craig |
| Abstract: | This paper examines the evolution of the returns to human capital in Canada over the period 1980-2006. Most of the analysis is based on Census data, and on weekly wage and salary earnings of full-time workers. Our main finding is that the returns to education increased substantially for Canadian men between 1980 and 2000, in contrast to conclusions reached in previous studies. For example, the adjusted wage gap between men with exactly a bachelors’ degree and men with only a high school diploma increased from 34 percent to 43 percent during this period. Most of this rise took place in the early 1980s and late 1990s. Returns to education also rose for Canadian women, but the magnitudes of the increases were more modest. For instance, the adjusted BA-high school wage differential among women increased about 4 percentage points between 1980 and 1985 and remained stable thereafter. Results based on Labour Force Survey data show the upward trend in returns to education has recently been reversed for both men and women. Another important development is that after fifteen years of expansion (1980-1995), the return to work experience measured by the wage gap between younger and older workers declined between 1995 and 2000. Finally, we find little difference between measures based on means and those based on medians of log wages for both genders. Also, the use of broader earnings measures (such as including self-employment earnings, using weekly earnings of all workers, or using annual earnings of full-time workers) does not alter the main conclusions from the analysis based on weekly wage and salary earnings of full-time workers. |
| Keywords: | Human Capital, Wage Differentials, Returns to Education, Canada |
| JEL: | J24 J31 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-8&r=hrm |
| By: | Chen, Dandan (The World Bank) |
| Abstract: | This paper examines the differentiated outcomes of vocational and general secondary academic education, particularly in terms of employment opportunities, labor market earnings, and access to tertiary education in Indonesia. With data from a panel of two waves of the Indonesia Family Life Survey in 1997 and 2000, the paper tracks a cohort of high school students in 1997 to examine their schooling and employment status in 2000. The findings demonstrate that: (1) attendance at vocational secondary schools results in neither market advantage nor disadvantage in terms of employment opportunities and/or earnings premium; (2) attendance at vocational schools leads to significantly lower academic achievement as measured by national test scores; and (3) There is no stigma attached to attendance at vocational schools that results in a disadvantage in access to tertiary education; rather, it is the lower academic achievement associated with attendance at vocational school that lowers the likelihood of entering college. The empirical approach of this paper addresses two limitations of the existing literature in this area. First, it takes into account the observation censoring issue due to college entry when evaluating labor market outcomes of secondary school graduates. Second, using an instrumental variable approach, the paper also treats endogeneity of household choice of vocational versus academic track of secondary education, teasing out the net effect of secondary school choice on labor market and schooling outcomes. |
| Keywords: | academic achievement; academic attainment; academic content; academic education; academic schools; access to higher education; access to tertiary education; catholic schools; classroom; classroom time |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4814&r=hrm |
| By: | Azam, Mehtabul (Southern Methodist University) |
| Abstract: | The tertiary-secondary (college-high school) wage premium has been increasing in India over the past decade, but the increase differs across age groups. The increase in wage premium has been driven mostly by younger age groups, while older age groups have not experienced any significant increase. This paper uses the demand and supply model with imperfect substitution across age groups developed in Card and Lemieux (2001) to explain the uneven increase in the wage premium across age groups in India. The findings of this paper are that the increase in the wage premium has come mostly from demand shifts in favor of workers with a tertiary education. More importantly, the demand shifts occurred in both the 1980s and 1990s. Relative supply has played an important role not only determining the extent of increase in wage premium, but also its timing. The increase in relative supply of tertiary workers during 1983-1993 offset the demand shift, limiting the wage premium increase. But during 1993-1999, the growth rate of the relative supply of tertiary workers decelerated, while relative supply was virtually stagnant during 1999-2004. Both of these periods saw an increase in the wage premium as the countervailing supply shift was weak. |
| Keywords: | India, wage premium, tertiary (college), secondary (high school) |
| JEL: | J20 J23 J31 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3968&r=hrm |
| By: | Andersson, Åke E (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This study gives an account of theory, models and measurements of returns to higher education, seen as the results of economically rational investment decisions. The focus is on returns in the form of increased wages and salaries. These returns vary considerably between different countries and tend to be considerably larger in the USA than in western Europe. One of the reasons for these differences in returns may be the differences in systems of funding of higher education. It is claimed that practically all studies of returns to investments in higher education disregard the benefits from reductions in consumer transaction costs and the role played by education as an important input in household production functions. Econometric studies, reported in the paper, accordingly indicate that the level of education has a considerable impact on the structure of household consumption expenditures. |
| Keywords: | education; returns; growth; higher education |
| JEL: | I21 I23 O11 O15 O31 |
| Date: | 2009–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0163&r=hrm |
| By: | Bill Adamson; Ritu Hooda (South Dakota State University) |
| Keywords: | retun to education, south dakota, wages, wage premium, education |
| JEL: | J31 J24 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:sda:ibrief:2008504&r=hrm |
| By: | Belton Fleisher (Department of Economics, Ohio State University); Haizheng Li (School of Economics, Georgia Institute of Technology); Min-Qiang Zhao (Department of Economics, Ohio State University) |
| Abstract: | We show how regional growth patterns in China depend on physical,, human, and infrastructure capital; foreign direct investment (FDI); and market reforms, especially the reforms that followed Deng Xiaoping’s South Trip in 1992 those that resulted from serious hardening of budget constraints of state enterprises around 1997. We find that FDI had a much larger effect on TFP growth before 1994 than after, and we attribute this to the encouragement of and increasing success of private and quasi-private enterprises. We find that human capital positively affects output per worker and productivity growth in our cross-provincial study. Moreover, we find both direct and indirect effects of human capital on TFP growth. The direct effect is hypothesized to come from domestic innovation activities, while the indirect impact is a spillover effect of human capital on TFP growth. We conduct cost-benefit analysis of hypothetical investments in human capital and infrastructure. We find that, while investment in infrastructure generates higher returns in the developed, eastern regions than in the interior, investing in human capital generates slightly higher or comparable returns in the interior regions. We conclude that human capital investment in less-developed areas can improve economic efficiency, neither investment strategy is a magic bullet for reducing China’s regional income disparities. |
| JEL: | O15 O18 O47 O53 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:osu:osuewp:09-01&r=hrm |
| By: | Rita Cappariello (Bank of Italy); Roberta Zizza (Bank of Italy) |
| Keywords: | irregular employment, underground economy, dual informal sector, occupational choice, education, school drop-out, North and South divide Abstract: The paper empirically tests the relationship between underground labour and schooling achievement for Italy, a country ranking badly in both respects when compared to other high-income economies, with a marked duality between North and South. In order to identify underground workers, we exploit the information on individualsÂ’ social security positions available from the Bank of ItalyÂ’s Survey on Household Income and Wealth. After controlling for a wide range of socio-demographic and economic variables and addressing potential endogeneity and selection issues, we show that a low level of education sizeably and significantly increases the probability of working underground. Switching from completing compulsory school to graduating at college more than halves this probability for both men and women. The gain is slightly higher for individuals completing the compulsory track with respect to those having no formal education at all. The different probabilities found for self-employed and dependent workers support the view of a dual informal sector, in which necessity and desirability coexist. |
| JEL: | I21 J24 O17 R23 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_702_09&r=hrm |
| By: | Kudo, Ines (The World Bank); Bazan, Jorge (Pontifical Catholic University of Peru) |
| Abstract: | Based on analysis of reading performance data from 475 third-graders in Peru, this study makes recommendations on improving reading tests, choice of reading standards, and how to present the results at the school and individual levels. The paper reviews the literature on using reading skills measurement in the early grades to guide policymaking, strengthen accountability, and improve education quality. It uses data generated from the same students using two common approaches to measuring reading skills: an individually-administered oral fluency test, and a group-administered written comprehension test designed by the Ministry of Education for the 2006 universal standard test of second grade reading comprehension. These two approaches have sometimes been presented as competing alternatives, but the paper shows that it is better if they are used together, as complements. Based on psychometric analysis, the paper shows that both the oral and written tests adequately measured studentsâÃÂàreading abilities. The results show that reading fluency and comprehension are correlated: fluent readers are more likely to understand what they read than non-fluent readers. The strength of the fluency-comprehension relationship depends on the level of fluency, the difficulty of the questions, and social characteristics of the school. The paper recommends using improved versions of both tests to evaluate early grade reading skills, as a central element of a system of accountability for results. It proposes a model for reporting test results desgned to highlight the importance of reading standards, mobilize the education community to reach them, track progress, and identify students in need of extra support. |
| Keywords: | academic performance; access to education; access to preschool; access to preschool education; Achievement; achievements; addition; adults; Assessment of Literacy; average score; Basic Skills; |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4812&r=hrm |
| By: | Fortin, Nicole; Parent, Daniel |
| Abstract: | In this paper we first analyze the determinants of training using data from the 2003 International Adult Literacy and Skills Survey (IALSS). We find that education plays a key role in the receipt of all forms of training except in the case of employer-sponsored training. We also find substantial differences across demographic groups in the relationship between literacy skills and training. In the second part of the paper we merge the 1994 IALS to the 2003 IALSS and perform an analysis of the impact of the Quebec policy introduced in 1995 by which employers are required to devote at least 1% of the payroll to training activities. In the case of males we find no effect of the policy on the incidence of employer-sponsored training. On the other hand, Quebec females did experience a very large relative increase in training incidence between 1994 and 2003. However, the magnitude of the estimates is much too large to be plausibly caused by the policy given its modest scale. We show evidence of a significant relative increase in female employment rates in Quebec that could explain part -but probably not all-of the large increase in female employer-sponsored training. |
| Keywords: | Literacy, Employer Training, Payroll Tax |
| JEL: | J24 J38 M53 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-10&r=hrm |
| By: | Vollmer, Sebastian (University of GAottingen); Ziegler, Maria (University of GAottingen) |
| Abstract: | Institutions are a major field of interest in the study of development processes. The authors contribute to this discussion concentrating our research on political institutions and their effect on the non-income dimensions of human development. First, they elaborate a theoretical argument why and under what conditions democracies compared to autocratic political systems might perform better with regards to the provision of public goods. Due to higher redistributive concerns matched to the needs of the population democracies should show a higher level of human development. In the following they analyze whether our theoretical expectations are supported by empirical facts. The authors perform a static panel analysis over the period of 1970 to 2003. The model confirms that living in a democratic system positively affects human development measured by life expectancy and literacy rates even controlling for GDP. By analyzing interaction effects they find that the performance of democracy is rather independent of the circumstances. However, democracy leads to more redistribution in favor of health provision in more unequal societies. |
| Keywords: | human development; democracy; political institutions; life expectancy; literacy; panel analysis |
| JEL: | H11 I10 I20 |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4818&r=hrm |