nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒08‒30
eight papers chosen by
Fabio Sabatini
University of Siena

  1. Human Capital, Talent, Agglomeration and Regional Growth By Karlsson, Charlie; Johansson, Börje; Stough, Roger R.
  2. The Occupations and Human Capital of U.S. Immigrants By Todd Schoellman
  3. Entrepreneurship, Wage Employment and Control in an Occupational Choice Framework By Douhan, Robin; van Praag, Mirjam
  4. Human Resource Practices and Value Capture from Investment in Knowledge/Innovation: Evidence from a Quasi-Experiment By Georgiadis, Andreas; Pitelis, Christos
  5. How do high school graduates in Japan compete for regular, full time jobs? An empirical analysis based upon an internet survey of the youth By Kenn Ariga; Masako Kurosawa; Fumio Ohtake; Masaru Sasaki
  6. The Co-twin Methodology and Returns to Schooling – Testing a Critical Assumption By Sandewall, Örjan; Cesarini, David; Johannesson, Magnus
  7. Social stratification and out-of-school learning By Andersson, Christian; Johansson, Per
  8. Comparative Advantage and Skill-specific Unemployment By Mario Larch; Wolfgang Lechthaler

  1. By: Karlsson, Charlie (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Johansson, Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Stough, Roger R. (School of Public Policy, George Mason University)
    Abstract: This paper is an introductory overview highlighting some of the current knowledge as regards three critical questions related to the emerging knowledge economy: i) Why does human capital and talent tend to agglomerate in large urban regions?, ii) How does this agglomeration affect the location of different types of economic activities?, and iii) How does this agglomeration affect regional growth? There are different underlying agglomerative forces creating spatially concentrated increasing returns to scale. Also, cities become centres of various amenities due to general increases in real incomes offering people spare time activities. One major reason for the agglomeration of production in urban regions and metro¬politan areas today is the existence of various positive externalities, providing good settings for industries and firms with knowledge-intensive and knowledge-creation activities, specialised business service firms and headquarters of multinational firms. There are strong tentative empirical evidences that the agglomeration of human capital contributes to regional development and growth. However, there is uncertainty concerning the size of the human capital externalities.
    Keywords: Human Capital Externalities; Talent; Knowledge Creation; Knowledge Spillover; Agglomeration; Urban Region; Regional Growth
    JEL: D62 D83 J24 R12 R23
    Date: 2009–08–26
  2. By: Todd Schoellman
    Abstract: This paper estimates the multi-dimensional human capital endowments of im¬migrants by characterizing their occupational decisions. This approach allows for estimation of physical skill and cognitive ability endowments, which are difficult to measure directly. Estimation implies that immigrants as a whole are abundant in cognitive ability and scarce in experience/training and communication skills. Counterfactual estimates of the wage impacts of immigration are skewed: the largest gain from preventing immigration is 3.2% higher wages, but the largest loss is 0.3% lower wages. Crowding of immigrants into select occupations plays a minor role in explain¬ing these impacts; occupations’ skill attributes explain the bulk.
    Keywords: Human Capital, Migration.
    JEL: F22 J24
    Date: 2009–08–19
  3. By: Douhan, Robin (Research Institute of Industrial Economics (IFN)); 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: I20 J24 J31 L26
    Date: 2009–08–20
  4. By: Georgiadis, Andreas; Pitelis, Christos
    Abstract: We analyse the link between human resource (HR) practices and the ability of firms to capture value from investments in knowledge-innovation and present evidence that supports a positive relationship between the two, employing an empirical design that utilises a unique data set that is based on a quasi-experiment. Our findings suggest that an additional pound invested in R&D, increases the rate of return of businesses that receive support in the form of employees and management/entrepreneur training, as well as improved workforce retention and recruitment, by significantly more than businesses that didn't receive such support. This has important implications for managerial practice and public policy.
    Date: 2009
  5. By: Kenn Ariga (Institute of Economic Research, Kyoto University); Masako Kurosawa (National Graduate Institute for Policy Studies); Fumio Ohtake (Institute of Social and Economic Research, Osaka University); Masaru Sasaki (Institute of Social and Economic Research, Osaka University)
    Abstract: We use a survey of the Japanese youth within 10 year after high school graduation to investiage the impacts of the academic and social skills on their success in the job market. We find three major factors account for the job market outcome immediately after school: school characteristics and job placement services, academic performance, and social skills, including the negative impacts of problematic behaviors at the school. Second, when we run a Probit regression on whether or not the surveyed individuals hold regular, full time job, we find the persistent but declining (over age) im- pact of the job placement immediately after school. Moreover, we find the impact of variables pertaining to the sociall skills remain significant even after controling for the job placement outcome after school, whereas other variables such as GPA or attributes of highschools are largely irrelevant to the current employment status.
    Date: 2009–08
  6. By: Sandewall, Örjan (London School of Economics); Cesarini, David (Department of Economics); Johannesson, Magnus (Department of Economics)
    Abstract: Twins-based estimates of the return to schooling feature prominently in the labor economics literature. The validity of such estimates hinges critically on the assumption that within-pair variation in schooling is explained by factors which are unrelated to wage earning ability. This paper develops a framework for testing this assumption, and finds, using a unique dataset of monozygotic twins, strong evidence against it. Di¤erences in adolescent IQ test scores predict within-pair variation in educational attainment, and including IQ in the wage equation causes within-pair point estimates for the returns to schooling to decline significantly. Our results thus cast doubt on the validity of estimates derived from the co-twin literature.
    Keywords: Returns to Schooling; Twins; Equal Ability Assumption
    JEL: I21 J24
    Date: 2009–08–24
  7. By: Andersson, Christian (Swedish National Audit Office); Johansson, Per (IFAU - Institute for Labour Market Policy Evaluation)
    Abstract: To study effects of out-of-school learning we use data on boarding home pupils who attended elementary public schools in the 1940’s. The out-of-school environment at the boarding homes could be considered being more learner friendly than the home environment on average: the pupils at the boarding homes had daily scheduled time for doing their homework under assistance of a junior school teacher and, in addition, they had access to a small library. The placement at boarding homes was based on the distance to the nearest school and had, thus, no direct connection to pupils’ skills which simplifies the empirical analysis based on register data. We find that the more learning friendly environment equalize skills at school leaving age. The effect is larger for kids with low initial ability.
    Keywords: Pedagogic personal; homework; early interventions
    JEL: I20 N34
    Date: 2009–08–10
  8. By: Mario Larch; Wolfgang Lechthaler
    Abstract: We introduce unemployment and endogenous selection of workers into different skill-classes in a trade model with two sectors and heterogeneous firms. This allows us to study the distributional consequences and the skill-specific unemployment effects of trade liberalization. We show that the gains from trade will be distributed very unequally. While unskilled workers loose in terms of real wages and employment levels in the skilled labor intensive sector, skilled workers loose in terms of real wages and unemployment levels in the unskilled labor intensive sector. However, the inequality of workers between sectors is much larger for skilled labor than for unskilled labor. On average, unemployment among unskilled workers increases when a skill-abundant country opens up to trade
    Keywords: Comparative advantage; heterogeneous firms; labor market frictions; unemployment; trade liberalization
    JEL: F11 F12 F16 J64 L11
    Date: 2009–08

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.