nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒04‒05
eleven papers chosen by
Fabio Sabatini
University of Siena

  1. Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe By Karin Mayr; Giovanni Peri
  2. Was Weber Wrong? A Human Capital Theory of Protestant Economic History: A Comment on Becker and Woessmann By Christoph A. Schaltegger; Benno Torgler
  3. Career progression and formal versus on-the-job training By Jerome Adda; Christian Dustmann; Costas Meghir; Jean-Marc Robin
  4. Ethnicity and Human Capital Accumulation in Urban Mexico By Hugo Nopo; Natalia Winder
  5. The Impact of Work-Related Training on Employee Earnings: Evidence from Great Britain. By Panos, Sousounis
  6. Micro evidence of the brain gain hypothesis: The case of Cape Verde By Catia Batista; Aitor Lacuesta; Pedro Vicente
  7. How do Training Programs Assign Participants to Training? Characterizing the Assignment Rules of Government Agencies for Welfare-to-Work Programs in California By Oscar Mitnik
  8. Returns to Higher Education – a regional perspective By Backman, Mikaela; Bjerke, Lina
  9. The Rise of the Service Economy By Francisco J. Buera; Joseph P. Kaboski
  10. Etnicidad y acumulación de capital humano en México Urbano By Hugo Nopo; Natalia Winder
  11. Managing Highly-Skilled Labour Migration: A Comparative Analysis of Migration Policies and Challenges in OECD Countries By Jonathan Chaloff; Georges Lemaître

  1. By: Karin Mayr (Johannes Kepler University, Linz); Giovanni Peri (University of California, Davis, CESifo and NBER)
    Abstract: Recent empirical evidence seems to show that temporary migration is a widespread phenomenon, especially among highly skilled workers who return to their countries of origin when these begin to grow. This paper develops a simple, tractable overlapping generations model that provides a rationale for return migration and predicts who will migrate and who returns among agents with heterogeneous abilities. The model also incorporates the interaction between the migration decision and schooling: the possibility of migrating, albeit temporarily, to a country with high returns to skills produces positive schooling incentive effects. We use parameter values from the literature and data on return migration to simulate the model for the Eastern-Western European case. We then quantify the effects that increased openness (to migrants) would have on human capital and wages in Eastern Europe. We find that, for plausible values of the parameters, the possibility of return migration combined with the education incentive channel reverses the brain drain into a significant brain gain for Eastern Europe.
    Date: 2009–04
  2. By: Christoph A. Schaltegger; Benno Torgler
    Abstract: This comment makes a contribution to Becker and Woessmann’s paper on a human capital theory of Protestant economic history eventually challenging the famous thesis by Max Weber who attributed economic success to a specific Protestant work ethic (Quarterly Journal of Economics 124 (2) (2009) forthcoming). The authors argue for a human capital approach: higher literacy among Protestants of the 19th century (and not a Protestant work ethic) contributed to higher economic prosperity at that point in history. However, the paper leaves the question open as to whether a Protestant specific work ethic existed or exists at all. Are there observable denomination-based differences in work ethic or is Protestantism only a veil hiding the underlying role of education? We use recent data to explore the role of Protestantism on work ethic. The results indicate that today’s work ethic in fact is influenced by denomination-based religiosity and also education.
    Keywords: Religion, Work Ethic, Protestantism, Education
    JEL: Z12 I20 J24
    Date: 2009–03–23
  3. By: Jerome Adda (Institute for Fiscal Studies and University College London); Christian Dustmann (Institute for Fiscal Studies and University College London); Costas Meghir (Institute for Fiscal Studies and University College London); Jean-Marc Robin (Institute for Fiscal Studies and EUREQua, University of Paris 1)
    Abstract: <p><p>We model the choice of individuals to follow or not apprenticeship training and their subsequent career. We use German administrative data, which records education, labour market transitions and wages to estimate a dynamic discrete choice </p><p></p><p>model of training choice, employment and wage growth. The model allows for returns to experience and tenure, match specific effects, job mobility and search frictions. We show how apprenticeship training affects labour market careers and we quantify its benefits, relative to the overall costs. We then use our model to show how two welfare reforms change life-cycle decisions and human capital accumulation: One is the introduction of an Earned Income Tax Credit in Germany, and the other is a reform to Unemployment Insurance. In both reforms we find very significant impacts of the policy on training choices and on the value of realized matches, demonstrating the importance of considering such longer term implications.</p></p>
    Date: 2009–02
  4. By: Hugo Nopo; Natalia Winder
    Abstract: This study analyzes social mobility and human capital accumulation among ethnic minorities in Mexican urban areas, exploring changes in educational attainment and labor market status and using panel data from the Mexican Family Life Survey (MFxLS). The results indicate important ethnic differences in human capital accumulation patterns, especially in education, where non-indigenous individuals seem to accumulate human capital more rapidly than individuals of indigenous descent. Also, key socio-demographic characteristics linked to those patterns of human capital accumulation seem to differ between indigenous and non-indigenous individuals. In particular, for indigenous peoples in urban areas, human capital accumulation and wealth accumulation seem to work as substitutes rather than complements in the short run.
    Keywords: Social mobility, human capital accumulation, education, ethnic minorities, urban areas, Mexico
    JEL: D13 J15 O18
    Date: 2008–12
  5. By: Panos, Sousounis
    Abstract: Using data from the British Household Panel Survey for the years 1998-2005, this study estimates the impact of work-related training on earnings levels. Different measures for general and specific training are constructed from available information. The analysis diverges from the standard fixed effects framework for earnings determination modelling and presents evidence in support of the predictions of the standard human capital theory with regards to training sponsoring using a random effects formulation for the earnings equation suggested by Nijman and Verbeek (1992) for controlling for attrition bias in unbalanced panels.
    Keywords: work-related training; human capital; earnings
    JEL: J31 C23 J24
    Date: 2009
  6. By: Catia Batista (Trinity College Dublin); Aitor Lacuesta (Banco de España); Pedro Vicente (Trinity College Dublin)
    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 specific question for the case of Cape Verde. This is allegedly the African country suffering from the largest "brain drain", despite also having a fast-growing stock of human capital. Our micro data enables us to propose a novel, explicit test of "brain gain" arguments according to which the possibility of own future emigration positively impacts educational attainment in the origin country. The innovative empirical strategy we propose hinges on the ideal characteristics of our survey, namely on full histories of migrants and on a new set of exclusion restrictions. Our results point to a very substantial impact of the “brain gain†channel on the educational attainment of those who do not emigrate. Alternative channels (namely remittances, family disruption, and general equilibrium effects at the local level) are also considered, but do not seem to play an important role. Our findings are robust to the choice of instruments and the empirical model.
    Keywords: Brain drain, brain gain, international migration, human capital, effects of emigration in origin countries, household survey, Cape Verde, sub-Saharan Africa
    JEL: F22 J24 O15
    Date: 2009–02
  7. By: Oscar Mitnik (Department of Economics, 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: 2008–12
  8. By: Backman, Mikaela (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Bjerke, Lina (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: The returns to education have been thoroughly investigated and Sweden has shown to have a relatively low return compared to other countries in Europe. Nevertheless, few studies have combined the regional perspective with returns to education. Hence, the purpose of the paper is to analyze regional differences in their returns to higher education within natural science, engineering and medicine. We assume that individuals maximize expected utility; they will try to attain the highest expected return to education as possible. The regional sum of employment possibilities as well as unemployment shares may differ between regions. Therefore, it is plausible to believe that the regional return to education varies between locations which accounted for in the empirical part of the paper. The result shows that there are clear differences between regional classifications concerning returns to higher education. Central urban regions, except the three largest cities and ten largest universities have the highest return to education. These regions may need to compensate the individuals with a higher return. The three largest cities in Sweden have a relatively low return but have other amenities that attract individuals.
    Keywords: returns to higher education; regional attractiveness; Sweden; Mincer equation
    JEL: H52 I21 I22 J61 R11
    Date: 2009–03–25
  9. By: Francisco J. Buera; Joseph P. Kaboski
    Abstract: This paper analyzes the role of specialized high-skilled labor in the growth of the service sector as a share of the total economy. Empirically, we emphasize that the growth has been driven by the consumption of services. Rather than being driven by low-skill jobs, the importance of skill-intensive services has risen, and this has coincided with a period of rising relative wages and quantities of high-skilled labor. We develop a theory where demand shifts toward ever more skill-intensive output as income rises, and because skills are highly specialized this lowers the importance of home production relative to market services. The theory is also consistent with a rising level of skill and skill premium, a rising relative price of services that is linked to this skill premium, and rich product cycles between home and market, all of which are observed in the data.
    JEL: D13 J22 J24 O14
    Date: 2009–03
  10. By: Hugo Nopo; Natalia Winder
    Abstract: Se analiza la movilidad social y la acumulación de capital humano entre minorías étnicas en zonas urbanas de México, se exploran los cambios en el logro académico y la situación en el mercado laboral y se emplean datos de panel provenientes de la Encuesta sobre la Vida de la Familia Mexicana (MFxLS). Los resultados apuntan a importantes diferencias étnicas en los patrones de acumulación de capital humano, especialmente en la educación, donde los individuos no indígenas parecen acumular capital humano con mayor rapidez que los individuos de descendencia indígena. Además, características sociales y demográficas vinculadas con esos patrones de acumulación de capital humano parecen diferir entre los individuos de extracción indígena y los de extracción no indígena. En especial, en el caso de pueblos indígenas en zonas urbanas, la acumulación de capital humano y la acumulación de riqueza parecen obrar más como sustitutos que como complementos en el corto plazo.
    Keywords: Social mobility, human capital accumulation, education, ethnic minorities, urban areas, Mexico
    JEL: D13 J15 O18
    Date: 2008–12
  11. By: Jonathan Chaloff; Georges Lemaître
    Abstract: Most OECD countries expect growing shortages of highly-skilled labour in the coming two decades, and immigration is viewed as one way of addressing these. Most OECD countries have introduced policies aimed at facilitating the recruitment of such workers in recent years and efforts along these lines can be expected to continue. The document provides an overview of the issues related to the management of highly skilled labour migration. In general, migrants are perceived as highly skilled when they have at least tertiary education, but other definitions are possible, notably on the basis of the nature of the occupation in which they are employed. One practical way of defining highly skilled migrants that has been used in some countries is by means of wages paid, with the highly skilled consisting of persons earning above a threshold value. There are two principal ways of recruiting highly skilled workers from abroad. One is demanddriven, through employer requests. The other is supply-driven and involves inviting candidates to apply and selecting them on the basis of certain characteristics, among them age, educational attainment, language proficiency and occupation, for which points are assigned. Candidates having more than a threshold level of points are then granted the right to establish residence. Supply-driven systems have been showing their limits in recent decades, with settlement countries finding it more difficult to select for success in the labour market. Employers appear to attribute less value to qualifications and work experience earned in a non-OECD country, so that immigrants arriving without jobs are having a harder time finding employment commensurate with their qualifications and experience. One consequence has been a general trend towards transferring more of the responsibility for selecting migrants to employers. In this way, any qualifications and experience issues are dealt in the hiring negotiations between employers and workers prior to immigration. A second option is to favour candidates for migration with qualifications earned in an OECD country and indeed, in the host country itself. Most OECD countries have in fact introduced measures to allow international students to stay on after they complete their studies, provided they can find work of an appropriate level in their field of study. Some countries, however, do not have significant basins of native-speakers outside their borders, so that hiring directly into jobs seems problematical, except in workplaces using an international language such as English. For such countries, some direct recruitment may still be possible, if an international language is widely spoken in the workplace. Otherwise supply-driven migration may have to be envisaged, with significant investments made in language teaching for new arrivals. Active recruitment means more than just facilitating work permits for employers or for aspirant immigrants based on credentials. While high-skilled migrants may be attracted to countries with widely spoken languages and high wages regardless of the obstacles, a country with moderate wages and its own unique language will need to do more than just lower administrative barriers. The effects of demographic change are only beginning to be felt in most countries. By 2010, more than half of OECD countries will show incoming labour force cohorts which are smaller than outgoing ones. The objective over the medium-term for OECD countries is to ensure the right scale and nature of movements to satisfy labour market needs. It would be premature to claim that all of the required policies are already in place.<P>Gérer les migrations de travailleurs hautement qualifiés : Une analyse comparative des politiques migratoires et des enjeux des migrations dans les pays de l’OCDE<BR>La plupart des pays de l’OCDE s’attendent à des pénuries croissantes de travailleurs qualifiés dans les prochaines deux décennies, et l’immigration pourrait bien être une des réponses à ce phénomène. Ces dernières années, ils ont mis en place des politiques pour faciliter le recrutement de ces travailleurs et l’on peut s’attendre à ce qu’ils poursuivent leurs efforts dans ce sens. Ce document donne un aperçu des questions portant sur la gestion des travailleurs immigrés hautement qualifiés. Généralement, un migrant hautement qualifié est sensé avoir au moins une éducation de niveau supérieur, mais d’autres définitions sont possibles, notamment sur la base de la profession exercée. Le niveau de salaire est aussi une référence pratique utilisée par certains pays pour considérer que les migrants hautement qualifiés sont les personnes qui reçoivent une rémunération au-dessus d’un certain seuil. Il y a deux principaux moyens pour recruter des travailleurs hautement qualifiés résidant à l’étranger. Le premier est à l’initiative de la demande des employeurs. L’autre est fondé sur l’offre et consiste à inviter les candidats à postuler, et leur admission dépend de certains critères sélectifs comme l’âge, le niveau d’instruction, la maîtrise de la langue et la profession exercée. Il s’agit d’un système à points au-delà d’un certain niveau de points obtenus, les candidats ont le droit de s’installer dans le pays d’accueil. Les systèmes fondés sur l’offre ont montré leurs limites au cours des décennies récentes, les pays d’accueil éprouvant des difficultés de recruter de manière à garantir une insertion réussie sur le marché du travail. Les employeurs semblent attribuer moins de valeur aux qualifications et à l’expérience professionnelle acquises dans un pays hors de la zone OCDE. Ainsi, les immigrés arrivant sans emploi préalable, éprouvent de sérieuses difficultés à trouver l’emploi correspondant à leur qualification et leur expérience. En conséquence, on note une tendance générale à transférer à l’employeur tout ou partie de la responsabilité du processus de sélection des candidats à l’immigration. De cette façon, toutes les questions de qualification et d’expérience sont abordées dans le cadre des négociations d’embauche entre les employeurs et les personnes à recruter avant l’immigration. Une deuxième option est de favoriser les candidats à la migration ayant obtenu leurs qualifications dans un pays de l’OCDE et encore plus s’il s’agit du pays d’accueil lui-même. La plupart des pays de l’OCDE ont en fait adopté des mesures pour permettre aux étudiants étrangers ayant achevé leurs études, de rester dans le pays pour rechercher un emploi en relation avec leur niveau et leur domaine d’étude. Dans certains pays, dont la langue nationale est peu parlée au-delà de leurs frontières, le recrutement direct reste problématique, sauf si la langue de travail est internationale, comme l’anglais. Pour de tels pays, le recrutement direct peut encore être possible, si une langue internationale est largement parlée dans les lieux de travail. Autrement, la migration impulsée par devrait être envisagée avec des investissements linguistiques importants demandés aux nouveaux arrivés. Une politique active de recrutement signifie bien davantage que la simple possibilité d’accorder des permis à des employeurs ou à des candidats à l’immigration, sur la base de la reconnaissance de leur niveau de connaissance. Si les migrants hautement qualifiés peuvent être attirés, quels que soient les obstacles à surmonter, par des pays où les salaires sont élevés et dont les langues nationales sont largement parlées, les pays ayant une langue peu parlée en dehors du territoire national et offrant des salaires moins élevés ne pourront se contenter uniquement de la levée des barrières administratives. Dans la plupart des pays, les effets de l’évolution démographique commencent tout juste à se faire sentir. Mais, à l’horizon 2010, plus de la moitié des pays de l’OCDE auront des cohortes entrantes de main d’œuvre moins nombreuses que les cohortes sortantes. L’objectif à moyen terme pour les pays de l’OCDE est d’avoir des mouvements dont l’ampleur et la nature permettront de répondre aux besoins du marché du travail. Il serait prématuré de prétendre que toutes les politiques requises sont d’ores et déjà en place.
    Keywords: integration, intégration, gestion de la migration, highly skilled migration, migration de travailleurs hautement qualifiés, demographic change, effets de l’évolution démographique, management of migration
    JEL: F22 J24 J44 J61
    Date: 2009–03–18

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