nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒03‒22
twelve papers chosen by
Fabio Sabatini
University of Siena

  1. Literacy Traps: Society-wide Education and Individual Skill Premia By Atal, Vidya; Basu, Kaushik; Gray, John; Lee, Travis
  2. Labour Market Outcomes and Skills Acquisition of High-School Dropouts By Campolieti, Michele; Fang, Tony; Gunderson, Morley
  3. Return Migration and Occupational Choice By Matloob Piracha; Florin Vadean
  4. The Economics & Psychology of Inequality and Human Development By Flavio Cunha; James J. Heckman
  5. What affects lifelong learning of scientists and engineers? By Grip Andries de; Smits Wendy
  6. Intergenerational Complementarities in Education and the Relationship between Growth and Volatility By Theodore Palivos; Dimitrios Varvarigos
  7. The Development of Employers’ Training Investments Over Time – A Decomposition Analysis Using German Establishment Data By Katja Goerlitz
  8. Do immigrants work in riskier jobs? By Pia M. Orrenius; Madeline Zavodny
  9. Public Knowledge, Private Knowledge: The Intellectual Capital of Entrepreneurs By Albert Link; Christopher Ruhm
  10. The Growth of Knowledge-Intensive Entrepreneurship in India, 1991-2007 Analysis of its Evidence and Facilitating Factors By Sunil Mani
  11. Natural disasters and human capital accumulation By Cuaresma, Jesus Crespo
  12. College major choice and the gender gap By Basit Zafar

  1. By: Atal, Vidya (Cornell University); Basu, Kaushik (Cornell University); Gray, John (Cornell University); Lee, Travis (Cornell University)
    Abstract: Using a model of O-ring production function, the paper demonstrates how certain communities can get caught in a low-literacy trap in which each individual finds it not worthwhile investing in higher skills because others are not high-skilled. The model sheds light on educational policy. It is shown that policy for promoting human capital has to take the form of a mechanism for solving the coordination failure in people’s choice of educational strategy.
    Keywords: education, literacy, O-ring, skill formation, traps
    JEL: D20 I28 J31
    Date: 2009–02
  2. By: Campolieti, Michele; Fang, Tony; Gunderson, Morley
    Abstract: We utilize an instrumental variable approach to analyse the effect that dropping out of high school has on 17 outcomes pertaining to wages, employment and subsequent skill acquisition for youths. Our analysis is based on the older cohort of the Youth in Transition Survey (YITS) for 2003, an ideal data set because it contains a rich array of outcome measures and their observable determinants as well as variables for instrumenting the dropout indicator (based on a link to the 1999 data). Our analysis indicates that dropouts have poorer wage and employment outcomes, and they do not make up for their lack of education through additional skill acquisition and training. The analysis thereby suggests that policies to curb dropping out could have both desirable efficiency effects (high returns) as well as distributional effects (high returns to otherwise more disadvantaged groups) and potential social spillover affects.
    Keywords: Education, Training, Youth, Labour Market Outcomes
    JEL: J18 J24 J31
    Date: 2009–03–15
  3. By: Matloob Piracha; Florin Vadean
    Abstract: This paper explores the impact of return migration on the Albanian economy by analysing the occupational choice of return migrants while explicitly differentiating between self-employment as either own account work or entrepreneurship. After taking into account the possible sample selection into return migration, we find that the own account workers have characteristics closer to non-participants in the labour market (i.e. lower education levels), while entrepreneurship is positively related to schooling, foreign language proficiency and savings accumulated abroad. Furthermore, compared to having not migrated, return migrants are significantly more likely not to participate in the labour market or to be entrepreneurs. However, after a one year re-integration period, the effect on non participation vanishes and that on entrepreneurship becomes stronger. As for non-migrants, the migration experience would have increased their probability to be entrepreneurs showing the positive impact of migration on job creating activities in Albania.
    Keywords: Occupational Choice; Return Migration; Sample Selection
    JEL: C35 F22 J24
    Date: 2009–03
  4. By: Flavio Cunha (University of Pennsylvania); James J. Heckman (University of Chicago & University College Dublin)
    Abstract: Recent research on the economics of human development deepens under- standing of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequal- ities in family environments and investments in children are substantial. They causally aect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for dierent out- comes. 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 dier depending on target outcomes of interest and on the nature of adversity in a child's early years. For some congurations of early disadvantage and for some desired outcomes, it is ecient 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
    Date: 2009–03–09
  5. By: Grip Andries de; Smits Wendy (ROA rm)
    Abstract: This paper greatly enriches the discussion on the determinants of lifelong learning of scientists and engineers (S&Es). In our analysis, which is based on a survey among S&Es in the Netherlands, we take account of both formal training and different modes of informal learning. We find that S&Es employed in firms which apply innovative production processes more often participate in formal training and also benefit from the informal learning potential of their jobs. Therefore, public policies that stimulate process innovation also prevent skills obsolescence among S&Es. However, lifelong learning is not triggered in firms with many product innovations. S&Es who are employed in firms which operate on highly competitive markets also participate in formal training less often. The same holds for S&Es employed in small firms, although the latter compensate their lower participation in formal training by more hours of self-teaching. S&Es employed in jobs which require a high level of technical knowledge have more formal training, whereas those employed in jobs which require more general skills are significantly more involved in informal learning. Furthermore, older S&Es with long firm tenures participate in formal training less often and have fewer opportunities for learning in their jobs. Therefore, their competence level is at risk.
    Keywords: education, training and the labour market;
    Date: 2009
  6. By: Theodore Palivos (Department of Economics, University of Macedonia); Dimitrios Varvarigos (Department of Economics, University of Leicester)
    Abstract: We construct an overlapping generations model in which parents vote on the tax rate that determines publicly provided education and offspring choose their effort in learning activities. The technology governing the accumulation of human capital allows these decisions to be strategic complements. In the presence of coordination failure, indeterminacy and, possibly, growth cycles emerge. In the absence of coordination failure, the economy moves along a uniquely determined balanced growth path. We argue that such structural differences can account for the negative correlation between volatility and growth.
    Keywords: Human Capital, Economic Growth, Volatility.
    JEL: O41
    Date: 2009–03
  7. By: Katja Goerlitz
    Abstract: Using establishment data covering the time period 1997 to 2007, this paper investigates trends of employer-sponsored further training in Germany, with a focus on the share of establishments that undertake training investments. I find an increasing trend for West and East German establishments alike. Applying Oaxaca-Blinder decomposition techniques shows that this increase is unrelated to compositional changes of average establishment characteristics. As the characteristics considered in the analysis represent the most commonly used variables in the literature on the determinants of training, this raises some questions for future research.
    Keywords: Continuous training, employers, time trends, decomposition analysis
    JEL: J24
    Date: 2009–02
  8. By: Pia M. Orrenius; Madeline Zavodny
    Abstract: Recent media and government reports suggest that immigrants are more likely to hold jobs with worse working conditions than U.S.-born workers, perhaps because immigrants work in jobs that "natives don?t want." Despite this widespread view, earlier studies have not found immigrants to be in riskier jobs than natives. This study combines individual-level data from the 2003?2005 American Community Survey with Bureau of Labor Statistics data on work-related injuries and fatalities to take a fresh look at whether foreign-born workers are employed in more dangerous jobs. The results indicate that immigrants are in fact more likely to work in risky jobs than U.S.-born workers, partly due to differences in average characteristics, such as immigrants' lower English language ability and educational attainment.
    Keywords: Immigrants ; Human capital ; Labor economics
    Date: 2009
  9. By: Albert Link; Christopher Ruhm
    Abstract: This paper focuses on the innovative actions of entrepreneurs, namely their tendency to reveal the intellectual capital that results from their research efforts either in the form of public knowledge (publications) or private knowledge (patents). Using data collected by the National Research Council within the U.S. National Academies from their survey of firm’s that received National Institutes of Health Phase II Small Business Innovation Research awards between 1992 and 2001, we find that entrepreneurs with academic backgrounds are more likely to publish their intellectual capital compared to entrepreneurs with business backgrounds, who are more likely to patent their intellectual capital. We also find that when universities are research partners, their presence complements the tendencies of academic entrepreneurs but does not offset those of business entrepreneurs.
    JEL: M14 O31
    Date: 2009–03
  10. By: Sunil Mani
    Abstract: The paper takes a critical look at the available quantitative evidence on the growth of knowledge-intensive entrepreneurship. It then looks at five facilitating factors for the emergence of this phenomenon in terms of the existence of increased market opportunities, availability of financial support schemes in the form of venture capital funds, existence and enlargement of a number of government programmes, a number of private sector initiatives and education and training leading to the supply of technically trained personnel. The paper concludes with certain policy suggestions for the continued sustenance of this activity. [ WP 409]
    Keywords: India, knowledge-intensive entrepreneurship, knowledge
    Date: 2009
  11. By: Cuaresma, Jesus Crespo
    Abstract: The author assesses empirically the relationship between natural disaster risk and investment in education. Although the results in the empirical literature tend to be inconclusive, using model averaging methods in the framework of cross-country and panel regressions, this paper finds an extremely robust negative partial correlation between secondary school enrollment and natural disaster risk. This result is exclusively driven by geological disasters. Natural disaster risk exposure is a robust determinant of differences in secondary school enrollment between countries, but not within countries, which implies that the effect can be interpreted as a long-run phenomenon.
    Keywords: Natural Disasters,Hazard Risk Management,Disaster Management,Population Policies,Access to Finance
    Date: 2009–03–01
  12. By: Basit Zafar
    Abstract: Males and females are markedly different in their choice of college major. Two main reasons have been suggested for the gender gap: differences in innate abilities and differences in preferences. This paper addresses the question of how college majors are chosen, focusing on the underlying gender gap. Since observed choices may be consistent with many combinations of expectations and preferences, I use a unique data set of Northwestern University sophomores that contains the students' subjective expectations about choice-specific outcomes. I estimate a choice model where selection of college major is made under uncertainty (about personal tastes, individual abilities, and realizations of outcomes associated with the choice of major). Enjoying coursework, finding fulfillment in potential jobs, and gaining the approval of parents are the most important determinants in the choice of college major. Males and females have similar preferences while in college, but their preferences diverge in terms of the workplace: Nonpecuniary outcomes at college are most important in the decisions of females, while pecuniary outcomes realized at the workplace explain a substantial part of the choice for males. I decompose the gender gap into differences in beliefs and preferences. Gender differences in beliefs about academic ability explain a small and insignificant part of the gap, a finding that allows me to rule out low self-confidence as a possible explanation for females' underrepresentation in the sciences. Conversely, most of the gender gap is the result of differences in beliefs about enjoying coursework and differences in preferences.
    Keywords: Demography ; College graduates ; Education
    Date: 2009

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.