nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒02‒28
fourteen papers chosen by
Fabio Sabatini
University of Siena

  1. Reinventing the Skilled Region: Human Capital Externalities and Industrial Change By Daniel F. Heuermann
  2. Labour Income Taxation, Human Capital and Growth: The Role of Child Care By Casarico, Alessandra; Sommacal, Alessandro
  3. Testing the 'Brain Gain' Hypothesis: MIcro Evidence from Cape Verde By Catia Batista, Aitor Lacuesta and Pedro C. Vicente
  4. After They Graduate: An Overview of the Iowa State University Alumni Survey By Jolly, Robert W.; Yu, Li; Orazem, Peter
  5. When is "Too Much" Inequality Not Enough? The Selection of Israeli Emigrants By Gould, Eric D; Moav, Omer
  6. Peer Effects and Social Networks in Education By Calvó-Armengol, Antoni; Patacchini, Eleonora; Zenou, Yves
  7. Money Matters: Evidence from a Large-Scale Randomized Field Experiment with Vouchers for Adult Training By Messer, Dolores; Wolter, Stefan
  8. The Economics and Psychology of Inequality and Human Development By Cunha, Flavio; Heckman, James J.
  9. How Do Training Programs Assign Participants to Training? Characterizing the Assignment Rules of Government Agencies for Welfare-to-Work Programs in California By Mitnik, Oscar A.
  10. Sustaining Growth in Korea by Reforming the Labour Market and Improving the Education System By Randall S. Jones; Masahiko Tsutsumi
  11. FDI, the Brain Drain and Trade: Channels and Evidence By de Melo, Jaime; Ivlevs, Artjoms
  12. The Performance of German Research Training Groups in Different Disciplinary Fields: An Empirical Assessment By Birgit Unger; Kerstin Pull; Uschi Backes-Gellner
  13. Human security and social quality: contrasts and complementaries By D. Gasper; Laurent J.G. van der Maesen; Thanh-Dam Truong; Alan Walker
  14. Physical Capital, Knowledge Capital and the Choice Between FDI and Outsourcing By Chen, Yongmin; Horstmann, Ignatius J; Markusen, James R.

  1. By: Daniel F. Heuermann (Institute for Labour Law and Industrial Relations in the EC, University of Trier)
    Abstract: Bridging the gap between the literatures on industrial change and human capital externalities we investigate the joint importance of aggregate regional education and job turnover for productivity effects to arise within firms and regional industries. On the level of regional industries we find strong evidence for the mutual dependence of skills and change inasmuch as regional human capital is a crucial ingredient for industrial change to be productivity enhancing, while human capital externalities arise first and foremost in dynamic labor markets. On the firm level, we find human capital externalities to accrue predominantly to growing firms which benefit from sharing, matching, and learning externalities arising from a large supply of human capital in skilled, dynamic labor markets. Despite the joint impact of human capital and industrial change on productivity we find only weak evidence that inter-industry differences in labor market dynamics of highly qualified workers shape the geography of industry location across German regions.
    Keywords: Human Capital Externalities, Job Turnover, Industrial Change
    JEL: D62 J24 R11 R12
    Date: 2009–02
  2. By: Casarico, Alessandra; Sommacal, Alessandro
    Abstract: This paper studies the effects of labour income taxation on growth in an OLG model where both formal schooling and child care enter the human capital production function as complements. We compare them with the effects obtained in a model where only formal schooling matters for skill formation. Using a numerical analysis we find that the omission of child care from the technology of skills' formation can significantly bias the results related to the effects of labour income taxation on growth.
    Keywords: child care; growth; human capital; labour supply; taxation
    JEL: H31 J22
    Date: 2008–11
  3. By: Catia Batista, Aitor Lacuesta and Pedro C. Vicente
    Abstract: Does emigration really drain human capital accumulation in origin countries? This paper explores a unique household survey purposely designed and conducted to answer this research question. We analyze the case of Cape Verde, a country with allegedly the highest ‘brain drain’ in Africa, despite a marked record of income and human capital growth in recent decades. Our micro data enables us to propose the first explicit test of ‘brain gain’ arguments according to which the prospects of own future migration can positively impact educational attainment. According to our results, a 10pp increase in the probability of own future migration improves the average probability of completing intermediate secondary schooling by 8pp. Our findings are robust to the choice of instruments and econometric model. Overall, we find that there may be substantial human capital gains from lowering migration barriers.
    Date: 2009–02–16
  4. By: Jolly, Robert W.; Yu, Li; Orazem, Peter
    Abstract: This report provides a descriptive overview of the Iowa State University Alumni Survey. In late 2007, 25,000 Iowa State University alumni who received bachelor's degree between 1982 and 2006 were surveyed to obtain information on their career paths, employment status, further education, entrepreneurial activities, community engagement and current income. The on-line and written survey resulted in approximately 5,500 valid returns.
    Keywords: human capital, career path, bachelor's degree recipients, land-grant university, entrepreneurship, personal income, community engagement.
    Date: 2009–02–17
  5. By: Gould, Eric D; Moav, Omer
    Abstract: This paper examines the effect of inequality on the incentives to emigrate according to a person’s observable and unobservable skills. Borjas (1987) shows that higher skilled individuals are more likely to emigrate than lower skilled individuals when the returns to skill are higher in a potential foreign destination. Building on this framework, we develop a model which shows that this prediction holds for observable skills like education which are "general" in the sense of being easily transferable to another country. However, we show that the relationship between unobservable skills and the probability of emigrating is an inverse U-shape - since unobservable skills are a mixture of "general skills" and "country-specific skills" which are not easily transferable. We examine the predictions of our model with a unique data set containing information on who emigrates from Israel between 1995 and 2004, combined with a full set of demographic and labor market variables for both movers and stayers in 1995. By exploiting differences between Israel and the United States in the returns to observable (education) and unobservable skills across different sectors (industries and occupations), we find strong evidence that a lower return to unobservable skills in Israel versus the US entices higher ability Israelis to leave the country. Also, we find that virtually the entire positive relationship between education and the rate of emigration would be eliminated if the returns to education were increased in Israel to US levels within each industry. Overall, the results strongly support our model and the importance of differentiating between general and "country-specific" skills in the analysis of immigrant selection.
    Keywords: country-specific skills; emigration; general skills; income inequality; return to education
    JEL: J61
    Date: 2008–09
  6. By: Calvó-Armengol, Antoni; Patacchini, Eleonora; Zenou, Yves
    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.
    Keywords: centrality measure; network structure; peer influence; school performance
    JEL: A14 C31 C72
    Date: 2008–11
  7. By: Messer, Dolores (University of Bern); Wolter, Stefan (Swiss Co-ordination Center for Research in Education)
    Abstract: This paper presents the results of a randomized experiment analyzing the use of vouchers for adult training. In 2006, 2,400 people were issued with a training voucher which they were entitled to use in payment for a training course of their choice. User behavior was compared with a control group of 14,000 people. People in the treatment and in the control group were not aware at any time that they were part of an experiment. The experiment shows that the voucher had a significant causal impact on participation in training modules. Nevertheless, the increase was partially offset by a deadweight loss in excess of fifty percent.
    Keywords: field experiment, voucher, adult education, training, Switzerland
    JEL: C93 I22 J24
    Date: 2009–02
  8. By: Cunha, Flavio (University of Pennsylvania); Heckman, James J. (University of Chicago)
    Abstract: Recent research on the economics of human development deepens understanding of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequalities in family environments and investments in children are substantial. They causally affect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for different outcomes. An empirically determined technology of capability formation reveals that capabilities are self-productive and cross-fertilizing and can be enhanced by investment. Investments in capabilities are relatively more productive at some stages of a child's life cycle than others. Optimal child investment strategies differ depending on target outcomes of interest and on the nature of adversity in a child's early years. For some configurations of early disadvantage and for some desired outcomes, it is efficient to invest relatively more in the later years of childhood than in the early years.
    Keywords: inequality, capabilities, noncognitive traits, human development, technology of capability formation, policy targeting
    JEL: A12
    Date: 2009–02
  9. By: Mitnik, Oscar A. (University of Miami)
    Abstract: A great deal of attention has been paid in the literature to estimating the impacts of training programs. Much less attention has been devoted to how training agencies assign participants to training programs, and to how these allocation decisions vary with agency resources, the initial skill levels of participants and the prevailing labor market conditions. This paper models the training assignment problem faced by welfare agencies, deriving empirical implications regarding aggregate training policies and testing these implications using data from Welfare-to-Work training programs run by California counties during the 1990s. I find that county welfare agencies do not seem to follow a simple returns-maximization model in their training assignment decisions. The results show that, as suggested by political economy models, the local political environment has a strong effect on training policies. In particular, I find that going from a Republican to a Democratic majority in a county’s Board of Supervisors has a strong effect on training policies, significantly increasing the proportion of welfare recipients receiving human capital development training.
    Keywords: assignment to training rules, welfare to work programs, local political environment
    JEL: C44 D73 I38 J24
    Date: 2009–02
  10. By: Randall S. Jones; Masahiko Tsutsumi
    Abstract: A well-functioning labour market is essential to sustain rapid economic growth in the face of population ageing. Priorities are to reverse the rising share of non-regular workers, which has negative implications for both growth and equity, and encourage greater employment of women and youth, who are under-represented in the labour force. Attracting more women to employment requires increasing the availability of childcare, strengthening maternity leave and creating more family-friendly workplaces. Youth employment rates should be boosted by upgrading tertiary education through stronger competition and closer links to enterprises to reduce mismatches. Educational reform should be extended to elementary and secondary schools to enhance efficiency and decrease the burden of private tutoring. The age of retirement of employees should be raised by eliminating mandatory retirement and phasing out the retirement allowance. Active labour market policies should focus on policies to expand human capital rather than wage subsidies.<P>Soutenir la croissance en Corée en réformant le marché du travail et en améliorant le système d'éducation<BR>Un marché du travail performant est indispensable au maintien d’une croissance économique rapide face au vieillissement de la population. Les objectifs prioritaires consistent à inverser l’augmentation de la part des travailleurs non réguliers, qui a des conséquences négatives à la fois pour la croissance et pour l’équité, et d’encourager une progression de l’emploi des femmes et des jeunes, qui sont sous-représentés dans la population active. Pour attirer davantage de femmes dans l’emploi, il faut accroître l’offre de services d’accueil des enfants, améliorer la situation en matière de congés de maternité et faire en sorte qu’il y ait davantage de lieux de travail où les obligations familiales sont prises en compte. Les taux d’emploi des jeunes devraient être favorisés en améliorant l’enseignement tertiaire grâce à un renforcement de la concurrence et à un resserrement des liens avec les entreprises afin de réduire les inadéquations. La réforme de l’éducation devrait être étendue aux établissements élémentaires et secondaires de façon à améliorer l’efficience et à diminuer la charge représentée par les cours de soutien privés. L’âge de départ à la retraite des salariés devrait être relevé en éliminant la retraite obligatoire et en supprimant progressivement l’indemnité de retraite. Dans le cadre des politiques actives du marché du travail, il faudrait privilégier le renforcement du capital humain plutôt que le versement de subventions salariales.
    Keywords: Korea, Corée, marché du travail, participation rates, travailleurs âgés, dualism, dualisme, employment protection, protection de l'emploi, travailleurs non réguliers, taux d'activité, female employment, non-regular workers, older workers, activité des femmes, taux de fécondité, labour market, company pensions, retraites allouées par l'entreprise, seniority-based wages, rémunération basée sur l'ancienneté, fertility rate, allocation de retraite, education reform, réforme de l'éducation, retirement allowance, emploi des jeunes
    JEL: J11 J3 J5 J7
    Date: 2009–02–20
  11. By: de Melo, Jaime; Ivlevs, Artjoms
    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: Brain Drain; FDI; Migration; Trade
    JEL: F13 F16 F22
    Date: 2008–10
  12. By: Birgit Unger (Eberhard Karls Universitaet Tuebingen); Kerstin Pull (Eberhard Karls Universitaet Tuebingen); Uschi Backes-Gellner (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: In the early 90s, the German Research Foundation (Deutsche Forschungsgemeinschaft, abbr. DFG) established a new form of graduate education: the so-called Research Training Groups (RTGs). Comparable to PhD programs in the US, RTGs offer a structured course program and a framework for collaborative research for young researchers. As a result, the comple¬tion rate of doctoral degrees and the scientific visibility of doctoral and postdoctoral research were held to increase. However, the performance of German RTGs has not been evaluated as yet. In this paper, we undertake a first step in that direction and assess the performance of German RTGs in two different disciplinary fields (humanities & social sciences vs. natural & life sciences). We do so in two important respects by assessing (1) the doctoral completion rate as an immediate outcome of the graduate teaching undertaken and (2) the scientific visibility of doctoral and postdoctoral students as measured by their publication and presen¬tation output. In our analysis of 86 German RTGs we are able to show that the performance of German RTGs varies considerably in and between the different disciplinary fields. An additionally performed Data Envelopment Analysis (DEA) hints at a considerable potential for a performance improvement.
    Keywords: Research Training Group, publications, presentations, doctoral completion rate, performance
    JEL: I21 I23
    Date: 2009–02
  13. By: D. Gasper; Laurent J.G. van der Maesen; Thanh-Dam Truong; Alan Walker
    Abstract: Two authors who have been leaders of the ‘social quality approach’ that emerged in European social policy circles in the 1990s, and two authors who have worked with the ‘human development’ and ‘human security’ approaches that emerged in international development policy circles in the 1980s and 90s, collaborate in this paper in order to outline and compare the two traditions. The ‘human development’ tradition has focused on the quality of individual human lives, understood as influenced by interconnections that transcend conventional disciplinary boundaries; its ‘human security’ branch goes deeper into study of human vulnerability and the textures of daily life. The ‘social quality’ tradition tries to understand individual lives as lived within a societal fabric, to identify and measure key elements of that fabric, and to develop a correspondingly grounded public policy approach. The paper is a first step in a project to assess the possible complementarity, in theorising and practical application, of these two streams of work.
    Keywords: Quality of life, social quality approach, human security, human development approach, ‘the social’
    Date: 2008
  14. By: Chen, Yongmin; Horstmann, Ignatius J; Markusen, James R.
    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).
    Keywords: FDI; hold-up; knowledge capital; outsourcing; physical capital
    JEL: F2 F23 L2 L22 L23
    Date: 2008–12

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