nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒05‒16
eight papers chosen by
Fabio Sabatini
University of Siena

  1. The role of firm-level and regional human capital for the social returns to education - Evidence from German social security data By Nils Braakmann
  2. Measurement of labor quality growth caused by unobservable characteristics By Bolli, Thomas; Zurlinden, Mathias
  3. Human Capital Investments in Education and Home Stability: Exploring Education, Homeownership and Poverty By Jordan, Jeffrey L.; Anil, Bulent; Herbert, Velma; Chatterjee, Swan
  4. Organizational Change, Skill Formation, Human Capital Measurement: Evidence From Italian Manufacturing Firms By G. Antonelli; R. Antonietti; G. Guidetti
  5. Skill-Biased Technical Change and Wage Inequality: The U.S. versus Europe By Ryosuke Okazawa
  6. HOW MUCH DOES IMMIGRATION BOOST INNOVATION? By Jennifer Hunt; Marjolaine Gauthier-Loiselle
  7. Natural disasters, self-insurance and human capital investment : evidence from Bangladesh, Ethiopia and Malawi By Yamauchi, Futoshi; Yohannes, Yisehac; Quisumbing, Agnes
  8. Costly Investment, Complementarities and the Skill Premium By Óscar Afonso; Maria Thompson

  1. By: Nils Braakmann (Institute of Economics, University of Lüneburg)
    Abstract: This paper provides first evidence on the anatomy of human capital externalities arising from both firm-level and regional human capital. Using panel data from German social security records, both at an individual and aggregated at the plant and regional level, I estimate earnings functions incorporating measures of regional and firm-level human capital while controlling for various types of unobserved heterogeneity. The results suggest that the firm-level share of high-skilled workers generates positive, although small social returns to education for low-skilled and skilled workers but not for the high-skilled. This finding is in line with learning based theories of human capital externalities. Some estimates also suggest negative social returns for the regional shares of low-skilled workers. No such effects are found for the firm-level shares of low-skilled workers and the regional shares of high-skilled workers.
    Keywords: Human capital externalities, social returns to education, error-component model
    JEL: D62 J24 J31 R11
    Date: 2009–04
  2. By: Bolli, Thomas (ETH Zurich); Zurlinden, Mathias (Swiss National Bank)
    Abstract: The standard economy-wide indices of labor quality (or human capital) largely ignore the role of unobservable worker characteristics. In this paper, we develop a methodology for identifying the contributions of both observable and unobservable worker characteristics in the presence of the incidental parameter problem. Based on data for Switzerland over the period 1991-2006, we find that a large part of growth in labor quality is caused by shifts in the distribution of unobservable worker characteristics. The overall index differs little from the standard indices, but contributions to growth attributed to education and age are corrected downwards.
    Keywords: human capital; labor quality
    JEL: J24 J31
    Date: 2009–01–15
  3. By: Jordan, Jeffrey L.; Anil, Bulent; Herbert, Velma; Chatterjee, Swan
    Abstract: The purpose of this paper is to investigate the relationship between housing uncertainties, child time preferences and education outcomes in the form of staying in school. The paper tests the hypothesis that students who face housing uncertainties through mortgage foreclosures and evictions learn impatient behavior and are therefore at greater risk of dropping our of school, impeding human capital formation and economic development.
    Keywords: discount rates, housing and educaiton, Community/Rural/Urban Development,
    Date: 2009
  4. By: G. Antonelli; R. Antonietti; G. Guidetti
    Date: 2009–03
  5. By: Ryosuke Okazawa (Graduate School of Economics, Kyoto University)
    Abstract: This paper analyzes the effect of the recent technical change on the labor market and explains the observed differences in wage inequality among advanced countries. In particular, we focus on the difference between the wage inequality in the U.S. and continental Europe. By introducing human capital investment into Acemoglu (1999)’s model, we show that ex ante homogeneous economies would have distinct ex post wage inequality. In addition, we show that the differences in tax or education system can explain the difference in wage inequality between the U.S. and Europe.
    Keywords: skill-biased technical change, wage inequality, human capital investment, matching
    JEL: E24 J24 J31 J64
    Date: 2009–04
  6. By: Jennifer Hunt; Marjolaine Gauthier-Loiselle
    Abstract: We measure the extent to which skilled immigrants increase innovation in the United States by exploring individual patenting behavior as well as state-level determinants of patenting. The 2003 National Survey of College Graduates shows that immigrants patent at double the native rate, and that this is entirely accounted for by their disproportionately holding degrees in science and engineering. These data imply that a one percentage point rise in the share of immigrant college graduates in the population increases patents per capita by 6%. This could be an overestimate of immigration's benefit if immigrant investors crowd out native investors, or an underestimate if immigrantes have positive spill-overs on investors. Using a 1950-2000 state panel, we show that natives are not crowded out by immigrants, and that immigrants do have positive spill-overs, resulting in an increase in patents per capita of about 15% in response to a one percentage point increase in immigrant college graduates. We isolate the causal effect by instrumenting the change in the share of skilled immigrants in a state with the initial share of immigrant high school dropouts from Europe, China and India. In both data sets, the positive impacts of immigrant post-college graduates and scientists and engineers are larger than for immigrant college graduates.
    Date: 2008–08
  7. By: Yamauchi, Futoshi; Yohannes, Yisehac; Quisumbing, Agnes
    Abstract: This paper examines the impacts of disasters on dynamic human capital production using panel data from Bangladesh, Ethiopia, and Malawi. The empirical results show that the accumulation of biological human capital prior to disasters helps children maintain investments in the post-disaster period. Biological human capital formed in early childhood (long-term nutritional status) plays a role of insurance with resilience to disasters by protecting schooling investment and outcomes, although disasters have negative impacts on investment. In Bangladesh, children with more biological human capital are less affected by the adverse effects of floods, and the rate of investment increases with the initial human capital stock in the post-disaster recovery process. In Ethiopia and Malawi, where droughts are rather frequent, exposure to highly frequent droughts in some cases reduces schooling investment but the negative impacts are larger among children embodying less biological human capital. Asset holdings prior to the disasters, especially the household's stock of intellectual human capital, also helps maintain schooling investments at least to the same degree as the stock of human capital accumulated in children prior to the disasters.
    Keywords: Natural Disasters,Hazard Risk Management,Access to Finance,Economic Theory&Research,Health Monitoring&Evaluation
    Date: 2009–04–01
  8. By: Óscar Afonso (CEFUP, OBEGEF, Faculdade de Economia, Universidade do Porto); Maria Thompson (NIPE, Escola de Economia e Gestão, Universidade do Minho)
    Abstract: We propose a new framework to analyse the wage premium behaviour. Building on Acemoglu and Zilibotti (2001), we introduce physical capital and two assumptions: (i) internal costly investment in both capital and R&D; (ii) complementarities between capital goods in production. We find that, for economies relatively abundant in high-skilled labour, a rise in the relative endowment of high-skilled labour is accompanied by a rise in the skill premium. We further find that a rise (i) in investment costs or (ii) in the complementarities degree, requires an increase in the relative endowment of high-skilled labour, for the economy to remain in the same growth equilibrium. For economies relatively abundant in high-skilled labour, such rises are also accompanied by an increase in the skill premium.
    Keywords: R&D, Technological-Knowledge Bias, Wage Inequality, Complementarities, Costly Investment
    JEL: J31 O31 O33 O47
    Date: 2009–04

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.