nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒07‒03
seventeen papers chosen by
Fabio Sabatini
University of Siena

  1. The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital By Charles I. Jones; Paul M. Romer
  2. Education, Market Rigidities and Growth. By Aghion, Ph.; Askenazy, Ph.; Bourlès, R.; Cette, G.; Dromel, N.
  3. The Complementarity between Cities and Skills By Edward L. Glaeser; Matthew G. Resseger
  4. The Impact of Demographic Change on Human Capital Accumulation By Christoph M. Schmidt; Michael Fertig; Mathias G. Sinning
  5. Entrepreneurial exit and entrepreneurial engagement By Roy Thurik; Jolanda Hessels; Isabel Grilo; Peter van der Zwan
  6. Human Capital Accumulation and Labour Market Equilibrium By Burdett, Ken; Carrillo-Tudela, Carlos; Coles, Melvyn
  7. Putting Tasks to the Test: Human Capital, Job Tasks and Wages By David H. Autor; Michael J. Handel
  8. The role of education in regional innovation activities and economic growth: spatial evidence from China By Chi, Wei; Qian, Xiaoye
  9. Entrepreneurship, Wage Employment and Control in an Occupational Choice Framework By Douhan, Robin; van Praag, Mirjam
  10. The Internationalization of Science and its Influence on Academic Entrepreneurship By Donald Siegel; Stefan Krabel; Viktor Slavtchev
  11. Long-Term Impact of Youth Minimum Wages: Evidence from Two Decades of Individual Longitudinal Data By Cardoso, Ana Rute
  12. The Ontario-Quebec Continental Gateway: A Situational Analysis of Human Resources Needs By Souleima El Achkar
  13. Skill Dispersion and Trade Flows By Matilde Bombardini; Giovanni Gallipoli; Germán Pupato
  14. Yet Another Tale of Two Cities: Buenos Aires and Chicago By Filipe Campante; Edward L. Glaeser
  15. Brain Drain in Globalization: A General Equilibrium Analysis from the Sending Countries' Perspective By Marchiori, Luca; Shen, I-Ling; Docquier, Frédéric
  16. Skills and Wage Inequality in Greece: Evidence from Matched Employer-Employee Data, 1995-2002 By Rebekka Christopoulou and Theodora Kosma
  17. Anti-Lemons: School Reputation and Educational Quality By W. Bentley MacLeod; Miguel Urquiola

  1. By: Charles I. Jones; Paul M. Romer
    Abstract: In 1961, Nicholas Kaldor used his list of six "stylized" facts both to summarize the patterns that economists had discovered in national income accounts and to shape the growth models that they were developing to explain them. Redoing this exercise today, nearly fifty years later, shows how much progress we have made. In contrast to Kaldor's facts, which revolved around a single state variable, physical capital, our six updated facts force consideration of four far more interesting variables: ideas, institutions, population, and human capital. Dynamic models have uncovered subtle interactions between these variables and generated important insights about such big questions as: Why has growth accelerated? Why are there gains from trade?
    JEL: O1 O3 O4
    Date: 2009–06
  2. By: Aghion, Ph.; Askenazy, Ph.; Bourlès, R.; Cette, G.; Dromel, N.
    Abstract: This paper investigates the effects of the education level, product market rigidities and employment protection legislation on growth. It exploits macro-panel data for OECD countries. For countries close to the technological frontier, education and rigidities are significantly related to TFP growth. The contribution of the interaction between product market regulation and labour market rigidity seems particularly substantial.
    Keywords: Productivity ; Growth ; Regulations ; Market Rigidities ; Education
    JEL: O47 J24 J68 L40 O57
    Date: 2009
  3. By: Edward L. Glaeser; Matthew G. Resseger
    Abstract: There is a strong connection between per worker productivity and metropolitan area population, which is commonly interpreted as evidence for the existence of agglomeration economies. This correlation is particularly strong in cities with higher levels of skill and virtually non-existent in less skilled metropolitan areas. This fact is particularly compatible with the view that urban density is important because proximity spreads knowledge, which either makes workers more skilled or entrepreneurs more productive. Bigger cities certainly attract more skilled workers, and there is some evidence suggesting that human capital accumulates more quickly in urban areas.
    JEL: D0 R0
    Date: 2009–06
  4. By: Christoph M. Schmidt; Michael Fertig; Mathias G. Sinning
    Abstract: This paper investigates whether and to what extent demographic change has an impact on human capital accumulation. The effect of the relative cohort size on educational attainment of young adults in Germany is analyzed utilizing data from the German Socio-Economic Panel forWest-German individuals of the birth cohorts 1966 to 1986. These are the cohorts which entered the labor market since the 1980’s. Particular attention is paid to the effect of changes in labor market conditions, which constitute an important channel through which demographic change may affect human capital accumulation. Our findings suggest that the variables measuring demographic change exert a considerable though heterogeneous impact on the human capital accumulation of young Germans. Changing labor market conditions during the 1980’s and 1990’s exhibit a sizeable impact on both the highest schooling and the highest professional degree obtained by younger cohorts.
    Keywords: Demographic change, schooling, vocational training
    JEL: J11 J24 C25
    Date: 2009–05
  5. By: Roy Thurik; Jolanda Hessels; Isabel Grilo; Peter van der Zwan
    Abstract: Arguing that entrepreneurial exit is an indicator of accumulated entrepreneurial human capital (like ability and experience) we investigate whether such an exit in the recent past positively relates to posterior engagement in various stages of the entrepreneurial process (i.e. potential, intentional, nascent, young, and established entrepreneurship). We use individual-level data for 24 countries that participated in the Global Entrepreneurship Monitor during the years 2004, 2005 and 2006 (some 350,000 observations). Our findings indeed show that recent exit experience decreases the probability of undertaking no entrepreneurial activity, and that it increases the probabilities of being a potential or an intentional entrepreneur. We also investigate under what conditions recent exit increases engagement in entrepreneurial activities. Most important factors that influence entrepreneurial (re-)engagement are gender, fear of failure and knowing an entrepreneur, while educational attainment does not seem to be relevant. Also, some interesting country differences are found.  
    Date: 2009–06–12
  6. By: Burdett, Ken (University of Pennsylvania); Carrillo-Tudela, Carlos (University of Leicester); Coles, Melvyn (University of Essex)
    Abstract: We analyse an equilibrium labour market with on-the-job search and experience effects (where workers learn-by-doing). The analysis yields a standard Mincer wage equation with worker fixed effects and endogenously determined firm fixed effects. It shows that learning-by-doing increases equilibrium wage dispersion consistent with the data. Equilibrium sorting - where over time more experienced workers also tend to find and quit to better paid employment - has a significant impact on wage inequality. As the model yields a cross section distribution of wages paid with the 'right' structure (the density of wages paid is single peaked with a 'fat' Pareto right tail) and yields the 'right' time profile of worker wage outcomes (the initial 10 years of a worker's career are characterised by several job changes and rapid wage growth) it yields a new, coherent statistical structure for future applied work.
    Keywords: search, wage dispersion, human capital accumulation
    JEL: J24 J42 J64
    Date: 2009–06
  7. By: David H. Autor; Michael J. Handel
    Abstract: Employing original, representative survey data, we document that cognitive, interpersonal and physical job task demands can be measured with high validity using standard interview techniques. Job tasks vary substantially within and between occupations, are significantly related to workers' characteristics, and are robustly predictive of wage differentials both between occupations and among workers in the same occupation. We offer a conceptual framework that makes explicit the causal links between human capital endowments, occupational assignment, job tasks, and wages. This framework motivates a Roy (1951) model of the allocation of workers to occupations. Tests of the model’s implication that 'returns to tasks' must negatively covary among occupations are strongly supported.
    JEL: J15 J16 J24 J31
    Date: 2009–06
  8. By: Chi, Wei; Qian, Xiaoye
    Abstract: This study examines one of the channels through which education may contribute to economic growth, specifically, innovation. Endogenous growth theory has long suggested that human capital lead to greater innovation and, through technology innovation and diffusion, contribute to economic growth. However, there is little evidence on the role of human capital in innovation. Using the Chinese provincial data from 1997 to 2006, we show that workers’ tertiary education is significantly and positively related to provincial innovative activities measured by invention patent applications per capita. This result does not vary when spatial dependence is allowed in the estimation. Thus, we find strong and robust evidence for the prediction of endogenous growth theory regarding the effect of human capital on innovation. However, we do not find the consistently significant effect of innovation on growth. This finding may, however, relate to the growth pattern in China.
    Keywords: Education; Human Capital; Innovation; Paten; Economic Growth; Spatial Analysis
    JEL: O1 O3
    Date: 2009–06
  9. By: Douhan, Robin (IFN - Research Institute of Industrial Economics); van Praag, Mirjam (University of Amsterdam)
    Abstract: We combine two empirical observations in a general equilibrium occupational choice model. The first is that entrepreneurs have more control than employees over the employment of and accruals from assets, such as human capital. The second observation is that entrepreneurs enjoy higher returns to human capital than employees. We present an intuitive model showing that more control (observation 1) may be an explanation for higher returns (observation 2); its main outcome is that returns to ability are higher in higher control environments. This provides a theoretical underpinning for the control-based explanation for higher returns to human capital for entrepreneurs.
    Keywords: entrepreneurship, ability, occupational choice, human capital, wage structure
    JEL: L26 I20 J24 J31
    Date: 2009–06
  10. By: Donald Siegel (School of Business University at Albany, SUNY); Stefan Krabel (Max Planck Institute of Economics Entrepreneurship, Growth and Public Policy Group); Viktor Slavtchev (Max Planck Institute of Economics Entrepreneurship, Growth and Public Policy Group)
    Abstract: We conjecture that the mobility of academic scientists increases the propensity of such agents to engage in academic entrepreneurship. Our empirical analysis is based on a survey of researchers at the Max Planck Society in Germany. We find that mobile scientists are more likely to become nascent entrepreneurs. Thus, it appears that citizenship and foreign-education are important determinants of the early stages of academic entrepreneurship.
    Keywords: Academic Entrepreneurship, Human Capital, Scientific Mobility, Knowledge Transfer, Immigrant Entrepreneurship
    JEL: L26 O31
    Date: 2009–01
  11. By: Cardoso, Ana Rute (IAE Barcelona (CSIC))
    Abstract: This paper quantifies the long-run impact of exposure to youth minimum wages and sheds light on its mechanisms. It uses remarkable longitudinal data spanning for twenty years and explores legislative changes that define groups of teenagers exposed for different durations. After controlling for the contemporaneous impact of the minimum wage, its long-run impact translates into: an overall wage premium, consistent with an upgrading in the quality of jobs offered; a flatter tenure-earnings profile, consistent with lower initial investment in firm-specific training. Interestingly, the overall wage premium increases with exposure and the tenure-earnings profile is flatter the longer the exposure.
    Keywords: skill formation, human capital investment, on-the-job-training, career, long-term, linked employer-employee data
    JEL: J08 J31 J24 J38
    Date: 2009–06
  12. By: Souleima El Achkar
    Abstract: This report examines human resource and skills issues pertaining to the Ontario-Quebec Continental Gateway and Trade Corridor over the short- to medium-term (within the next five years). Based on information gathered through interviews with industry representatives and labour market data analysis, the report identifies common and inter-related challenges across the Gateway sectors (construction, air, marine, road and rail transportation, supply chain and multimodal transportation, and border security). Despite the economic downturn, there may be shortages of skilled labour in certain occupations. The report presents strategies being implemented by companies and industry associations to address human resource and skills challenges, and identifies existing gaps.
    Keywords: Construction, transportation, border security, skills, human resources, labour market, human capital, recruitment, skilled workers, training, standards
    JEL: J21 J24 J48 J68 I28 R10
    Date: 2009–05
  13. By: Matilde Bombardini; Giovanni Gallipoli; Germán Pupato
    Abstract: Is skill dispersion a source of comparative advantage? While it is established that a country's aggregate endowment of human capital is an important determinant of comparative advantage, this paper investigates whether the distribution of skills in the labor force can play a role in the determination of trade flows. We develop a multi-country, multi-sector model of trade in which comparative advantage derives from (i) differences across sectors in the complementarity of workers' skills, (ii) the dispersion of skills in the working population. First, we show how higher dispersion in human capital can trigger specialization in sectors characterized by higher substitutability among workers' skills. We then use industry-level bilateral trade data to show that human capital dispersion, as measured by a standard international metric, has a significant effect on trade flows. We find that the effect is of a magnitude comparable to that of aggregate endowments. The result is robust to the introduction of several controls for other proximate causes of comparative advantage.
    JEL: F12 F16 J82
    Date: 2009–06
  14. By: Filipe Campante; Edward L. Glaeser
    Abstract: Buenos Aires and Chicago grew during the nineteenth century for remarkably similar reasons. Both cities were conduits for moving meat and grain from fertile hinterlands to eastern markets. However, despite their initial similarities, Chicago was vastly more prosperous for most of the 20th century. Can the differences between the cities after 1930 be explained by differences in the cities before that date? We highlight four major differences between Buenos Aires and Chicago in 1914. Chicago was slightly richer, and significantly better educated. Chicago was more industrially developed, with about 2.25 times more capital per worker. Finally, Chicago’s political situation was far more stable and it wasn’t a political capital. Human capital seems to explain the lion’s share of the divergent path of the two cities and their countries, both because of its direct effect and because of the connection between education and political instability.
    JEL: D0 N0 R0
    Date: 2009–06
  15. By: Marchiori, Luca (Catholic University of Louvain); Shen, I-Ling (University of Geneva); Docquier, Frédéric (Catholic University of Louvain)
    Abstract: The paper assesses the global effects of brain drain on developing economies and quantifies the relative sizes of various static and dynamic impacts. By constructing a unified generic framework characterized by overlapping-generations dynamics and calibrated to real data, this study incorporates many direct impacts of brain drain whose interactions, along with other indirect effects, are endogenously and dynamically generated. Our findings suggest that the short-run impact of brain drain on resident human capital is extremely crucial, as it does not only determine the number of skilled workers available to domestic production, but it also affects the sending economy's capacity to innovate or to adopt modern technologies. The latter impact plays an important role particularly in a globalized economy where capital investments are made in places with higher production efficiencies ceteris paribus. Hence, in spite of several empirically documented positive feedback effects, those countries with high skilled emigration rates are the most candid victims to brain drain since they are least likely to benefit from the "brain gain" effect, and thus suffering from declines of their resident human capital.
    Keywords: brain drain, capital flow, development, human capital, remittances
    JEL: F22 J24 O15
    Date: 2009–06
  16. By: Rebekka Christopoulou and Theodora Kosma
    Abstract: This paper examines changes in the Greek wage distribution over 1995-2002 and the role of skill in these changes. The methodology adopted is the Machado-Mata counterfactual decomposition, which separates the part of wage changes that is due to job and workers' characteristics (composition effects) from the part due to the returns to these characteristics (price effects). We find that mean wages have not increased substantially, but wage inequality has, mostly at the upper tail of the distribution. The role of skill has been decisive. Falling tenure levels at all but the very high wage deciles, and rising education across the board, have carried much of the inequality increasing influence of overall composition effects. Although to a lesser extent, changes in the returns to skill have contributed to inequality by forming a U-shaped pattern along the wage distribution. This pattern is further reinforced when price-effects of skill are added together with the composition effect of tenure to produce the share of skill-effects that is responsive to market forces. Drawing on this evidence, we make a case for the routinization hypothesis.
    Keywords: Returns to skill; Wage inequality; Quantile regression.
    Date: 2009–05
  17. By: W. Bentley MacLeod; Miguel Urquiola
    Abstract: Friedman (1962) argued that a free market in which schools compete based upon their reputation would lead to an efficient supply of educational services. This paper explores this issue by building a tractable model in which rational individuals go to school and accumulate skill valued in a perfectly competitive labor market. To this it adds one ingredient: school reputation in the spirit of Holmstrom (1982). The first result is that if schools cannot select students based upon their ability, then a free market is indeed efficient and encourages entry by high productivity schools. However, if schools are allowed to select on ability, then competition leads to stratification by parental income, increased transmission of income inequality, and reduced student effort---in some cases lowering the accumulation of skill. The model accounts for several (sometimes puzzling) findings in the educational literature, and implies that national standardized testing can play a key role in enhancing learning.
    JEL: D02 I2 J3
    Date: 2009–06

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.
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