nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒10‒10
eighteen papers chosen by
Fabio Sabatini
University of Siena

  1. Regional Economic Growth and Human Capital: The Role of Overeducation By Ramos, Raul; Surinach, Jordi; Artís, Manuel
  2. Brains versus Brawn: Labor Market Returns to Intellectual and Health Human Capital in a Poor Developing Country By Jere R. Behrman; John Hoddinott; John A. Maluccio; Reynaldo Martorell
  3. Immigrants and Employer-Provided Training By Barrett, Alan; McGuinness, Seamus; O'Brien, Martin; O'Connell, Philip J.
  4. Employment growth in newly established firms: is there evidence for academic entrepreneur's human capital depreciation? By Müller, Kathrin
  5. The Inter-Related Dynamics of Dual Job Holding, Human Capital and Occupational Choice By Panos, Georgios A.; Pouliakas, Konstantinos; Zangelidis, Alexandros
  6. An Explanation for the Lower Payoff to Schooling for Immigrants in the Canadian Labour Market By Chiswick, Barry R.; Miller, Paul W.
  7. Scale and Scope - human capital and the structure of regional export flows By Andersson, Martin; Johansson, Sara
  8. The Impact of Training on Productivity and Wages: Firm Level Evidence By Jozef Konings; Stijn Vanormelingen
  9. Why Do Firms Use Fixed-Term Contracts? By Portugal, Pedro; Varejão, José
  10. Does Military Draft Discourage Enrollment in Higher Education? Evidence from OECD Countries By Keller, Katarina; Poutvaara, Panu; Wagener, Andreas
  11. The Causal Effect of Education on Wages Revisited By Dickson, Matt
  12. Formation of Heterogeneous Skills and Wage Growth By Shintaro Yamaguchi
  13. A Risk Augmented Mincer Earnings Equation? Taking Stock By Hartog, Joop
  14. International Human Capital Formation, Brain Drain and Brain Gain: A conceptual Framework By Bernard Franck; Robert F. Owen
  15. Impact of Paternal Temporary Absence on Children Left Behind By Booth, Alison L.; Tamura, Yuji
  16. Does the Choice of Reference Levels of Education Matter in the ORU Earnings Equation? By Chiswick, Barry R.; Miller, Paul W.
  17. Schooling, Fertility, and Married Female Labor Supply: What Role for Health? By Matthias Cinyabuguma; Bill Lord; Christelle Viauroux
  18. Beyond Technological Diversification: The Impact of Employee Diversity on Innovation By Christian R. Østergaard; Bram Timmermans; Kari Kristinsson

  1. By: Ramos, Raul (University of Barcelona); Surinach, Jordi (University of Barcelona); Artís, Manuel (University of Barcelona)
    Abstract: The paper analyses the link between human capital and regional economic growth in the European Union. Using various indicators of human capital calculated from census microdata, we conclude that the recent economic performance of European regions is associated with an increase in overeducation. In fact, measures of educational mismatch seem to be more strongly connected to regional economic performance than do other traditional measures of human capital stock.
    Keywords: regional economic growth, human capital, educational mismatch, overeducation
    JEL: O18 O47 R23
    Date: 2009–09
  2. By: Jere R. Behrman; John Hoddinott; John A. Maluccio; Reynaldo Martorell
    Abstract: Previous studies report that adult height has significant associations with wages even controlling for schooling. But schooling and height are imperfect measures of adult cognitive skills (“brains”) and strength (“brawn”); further they are not exogenous. Analysis of rich Guatemalan longitudinal data over 35 years finds that proximate determinants—adult reading comprehension skills and fat-free body mass—have significantly positive associations with wages, but only brains, and not brawn, is significant when both human capital measures are treated as endogenous. Even in a poor developing economy in which strength plausibly has rewards, labor market returns are increased by brains, not brawn.
    Date: 2009–07
  3. By: Barrett, Alan (ESRI, Dublin); McGuinness, Seamus (Economic and Social Research Institute, Dublin); O'Brien, Martin (University of Wollongong); O'Connell, Philip J. (ESRI, Dublin)
    Abstract: Much has been written about the labour market outcomes for immigrants in their host countries, particularly with regard to earnings, employment and occupational attainment. However, much less attention has been paid to the question of whether immigrants are as likely to receive employer-provided training relative to comparable natives. As such training should be crucial in determining the labour market success of immigrants in the long run it is a critically important question. Using data from a large scale survey of employees in Ireland, we find that immigrants are less likely to receive training from employers, with immigrants from the New Member States of the EU experiencing a particular disadvantage. The immigrant training disadvantage arises in part from a failure on the part of immigrants to get employed by training-oriented firms. However, they also experience a training disadvantage relative to natives within firms where less training is provided.
    Keywords: immigrants, employer-provided training, Ireland
    JEL: J24 J61
    Date: 2009–09
  4. By: Müller, Kathrin
    Abstract: Human capital is known to be one of the most important predictors of a person's earnings. With regard to entrepreneurial success, founders' human capital is an important determinant of firm's employment growth as well. This paper investigates if the depreciation of a founder's academic knowledge affects a start-up's employment growth. The depreciation of academic knowledge is investigated by quantifying the effect of the time period which elapses after the founder has left university until the start-up is founded on firm's employment growth. Using quantile regressions, human capital depreciation is found to be of crucial importance for both ordinary academic start-ups and academic spin-offs, the founders of the latter suffering even more from human capital depreciation.
    Keywords: Human capital depreciation,employment growth,academic entrepreneurship
    JEL: J23 J24 L25 L26
    Date: 2009
  5. By: Panos, Georgios A. (University of Aberdeen); Pouliakas, Konstantinos (University of Aberdeen); Zangelidis, Alexandros (University of Aberdeen)
    Abstract: The inter-related dynamics of dual job-holding, human capital and occupational choice between primary and secondary jobs are investigated, using a panel sample (1991-2005) of UK employees from the British Household Panel Survey (BHPS). A sequential profile of the working lives of employees is examined, investigating, first, the determinants of multiple job-holding, second, the factors affecting the occupational choice of a secondary job, third, the relationship between multiple-job holding and job mobility and, lastly, the spillover effects of multiple job-holding on occupational mobility between primary jobs. The evidence indicates that dual job-holding may facilitate job transition, as it may act as a stepping-stone towards new primary jobs, particularly self-employment.
    Keywords: moonlighting, occupational choice, human capital, mobility
    JEL: J22 J24 J62
    Date: 2009–09
  6. By: Chiswick, Barry R. (University of Illinois at Chicago); Miller, Paul W. (University of Western Australia)
    Abstract: This paper examines the difference between the payoffs to schooling for immigrants and the native born in Canada, using 2001 Census data. Analyses are presented for males and females. Comparisons are offered with findings for the US. The paper uses the Overeducation/Required education/Undereducation framework (Hartog, 2000) and a decomposition developed by Chiswick and Miller (2008). This decomposition links overeducation to the less-than-perfect international transferability of immigrants' human capital, and under-education to favourable selection in immigration. The results show that immigrants have a lower payoff to schooling because of the different effects under-education and over-education have on their earnings. The effects of under-education, or selection in immigration, are, however, twice as large as the effects of over-education, or limited international transferability of human capital. Favourable selection in immigration appears to be less important in Canada than in the US, where it predominates among the least educated.
    Keywords: immigrants, skill, schooling, earnings, rates of return, Canada
    JEL: I21 J24 J31 J61 F22
    Date: 2009–09
  7. By: Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Johansson, Sara (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper presents an empirical analysis of the relationship between human capital endowments and the structure of regional export flows. Since the development of each export product may be assumed to be associated with innovation activity, requiring human capital inputs, the core hypothesis tested in this paper is that cross-regional variations in endowments of human capital influence the extensive margin (number of export products) rather than the intensive margin (average export value per product). The hypothesis is tested in a cross-regional regression model, applied to aggregate and within-industry export flows from Swedish regions. The empirical results confirm the theoretical prediction that the response of regional export flows to cross-regional variations in human capital is an increase in the extensive margin. To the extent that the regional human capital endowment affects the intensive margin, the effect is a higher average price per export product.
    Keywords: product differentiation; knowledge; human capital; accessibility; export diversity; extensive margin; economies of scale
    JEL: F12 F14 R12 R32
    Date: 2009–09–28
  8. By: Jozef Konings; Stijn Vanormelingen
    Abstract: This paper uses ?rm level panel data of ?rm provided training to estimate its impact on productivity and wages. To this end the strategy proposed by Ackerberg, Caves and Frazer (2006) for estimating production functions to control for the endogeneity of input factors and training is applied. The productivity premium for a trained worker is estimated at 23%, while the wage premium of training is estimated at 12%. Our results give support to recent theories that explain work related training by imperfect competition in the labor market.
    Keywords: Training, production functions, human capital
    JEL: J24 J31 L22
    Date: 2009
  9. By: Portugal, Pedro (Universidade Nova de Lisboa); Varejão, José (University of Porto)
    Abstract: Temporary forms of employment account for a variable but never trivial share of total employment in both the U.S. and in Europe. In this article we look at how one specific form of temporary employment − employment with fixed-term contracts − fits into employers' hiring policies. We find that human capital variables (schooling, skills and employer-provided training) as measured at the levels of the worker and the workplace are important determinants of the employers’ decisions to hire with fixed-term contracts and to promote temporary workers to permanent positions. Those employers that hire more with fixed-term contracts are also those that are more likely to offer a permanent position to their newly-hired temporary employees. Our results indicate that fixed-term contracts are used as mechanisms for screening workers for permanent positions.
    Keywords: fixed-term contracts, adjustment costs, labor demand
    JEL: J23 J41
    Date: 2009–08
  10. By: Keller, Katarina (Susquehanna University); Poutvaara, Panu (University of Helsinki); Wagener, Andreas (University of Hannover)
    Abstract: Using data from 1960-2000 for OECD countries, we analyze the impact of compulsory military service on the demand for higher education, measured by students enrolled in tertiary education as a share of the working-age population. Based on a theoretical model, we hypothesize that military draft has a negative effect on education. Empirically, we confirm this for the existence of conscription, albeit usually at low statistical significance. However, the intensity of its enforcement, measured by the share of the labor force conscripted by the military and the duration of service, significantly reduces enrollment in higher education.
    Keywords: human capital, conscription
    JEL: H56 I20
    Date: 2009–09
  11. By: Dickson, Matt (University of Bristol)
    Abstract: This paper estimates the return to education using two alternative instrumental variable estimators: one exploits variation in schooling associated with early smoking behaviour, the other uses the raising of the minimum school leaving age. Each instrument estimates a 'local average treatment effect' and my motivation is to analyse the extent to which these differ and which is more appropriate for drawing conclusions about the return to education in Britain. I implement each instrument on the same data from the British Household Panel Survey, and use the over-identification to test the validity of my instruments. I find that the instrument constructed using early smoking behaviour is valid as well as being strong, and argue that it provides a better estimate of the average effect of additional education, akin to ordinary least squares but corrected for endogeneity. I also exploit the dual sources of exogenous variation in schooling to derive a further IV estimate of the return to schooling. I find the OLS estimate to be considerably downward biased (around 4.6%) compared with the IV estimates of 12.9% (early smoking), 10.2% (RoSLA) and 12.5% (both instruments).
    Keywords: human capital, endogeneity, local average treatment effect
    JEL: I20 J30
    Date: 2009–09
  12. By: Shintaro Yamaguchi
    Abstract: This paper examines how primitive skills associated with occupations are formed and rewarded in the labor market over the careers of men. The objective task complexity measurement from the Dictionary of Occupational Titles enables a more direct look into the primitive skills of workers. I show that the optimal choice of task complexity is a linear function of unobserved skills, worker characteristics, and preference shocks, which implies that the observed task complexity is a noisy signal of underlying skills. Using career histories from the NLSY79, the growth of cognitive and motor skills as well as structural parameters are estimated by the Kalman filter. The results indicate that both cognitive and motor skills account for a considerable amount of cross-sectional wage variation. I also find that cognitive skills grow over careers and are the main source of wage growth; this pattern is particularly pronounced for the highly educated. In contrast, motor skills grow and contribute to wage growth substantially only for high school dropouts.
    Keywords: Human Capital; Occupational Choice; Occupational Tasks; Kalman Filter; Structural Estimation
    JEL: J24 J32
    Date: 2009–09
  13. By: Hartog, Joop (University of Amsterdam)
    Abstract: We survey the literature on the Risk Augmented Mincer equation that seeks to estimate the compensation for uncertainty in the future wage to be earned after completing an education. There is wide empirical support for the predicted positive effect of wage variance and the negative effect of wage skew. We discuss robustness of the findings across specifications, potential bias from unobserved heterogeneity and selectivity and consider the core issue of students’ information on benefits from education.
    Keywords: human capital, earnings function, risk
    JEL: J31 D8
    Date: 2009–09
  14. By: Bernard Franck (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen); Robert F. Owen (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: A two-country, two-period model of international migration highlights microeconomic foundations for examining the interrelation between brain drain, brain gain and the location of human capital formation, at home or abroad. Ex ante choices regarding where to study depend on relative qualities of university systems, individuals' abilities, sunk educational investment costs, government grants, and expected employment prospects in both countries. The analysis underscores an inherently widerange of conceivable positive or negative effects on domestic net welfare. These changes depend critically on the foregoing factors, as well as the optimal design of educational grant schemes, given eventual informational imperfections regarding individuals' capabilities.
    Date: 2009–10–01
  15. By: Booth, Alison L. (Australian National University); Tamura, Yuji (Australian National University)
    Abstract: Using the first two waves of the Vietnam Living Standards Survey, we investigate how a father's temporary absence affects children left behind in terms of their school attendance, household expenditures on education, and nonhousework labor supply in the 1990s. The estimating subsample is children aged 7-18 in households in which both parents usually coreside and the mother has not been absent. Our results indicate that paternal temporary absence increases nonhousework labor supply by his son. The longer the absence of the father, the larger the impact. One additional month of paternal temporary absence increases a son's nonhousework labor supply by approximately one week. However, a daughter's nonhousework labor supply is not affected. We find no evidence that paternal temporary absence influences his children in terms of school attendance or education-related household expenditures.
    Keywords: parental absence, temporary migration, schooling, human capital investment, child labor, Vietnam, VLSS
    JEL: I22 O15 P36
    Date: 2009–08
  16. By: Chiswick, Barry R. (University of Illinois at Chicago); Miller, Paul W. (University of Western Australia)
    Abstract: This paper examines whether the results of the earnings equation developed in the overeducation/required eduation/under-education (ORU) literature are sensitive to whether the usual or reference levels of education are measured using the Realized Matches or Worker Self-Assessment methods. The analyses are conducted for all male native-born and immigrant workers in the US, by level of skill, and by occupation. While point estimates differ, particularly when earnings equations are estimated for the smaller samples of sub-groups of the workforce, the general findings are robust to this measurement issue. Thus, the answers provided to the typical research questions in the ORU literature on the utilization of schooling are independent of the measure of the usual or reference level of education used in the analyses.
    Keywords: immigrants, skill, schooling, occupations, earnings, rates of return
    JEL: I21 J24 J31 J61 F22
    Date: 2009–08
  17. By: Matthias Cinyabuguma (UMBC); Bill Lord (UMBC); Christelle Viauroux (UMBC)
    Abstract: Between the latter nineteenth century and the 1930s there was a dramatic revolution in American families. Family size continued its long-term decline, the schooling of older children expanded and the proportion of married females' adulthood devoted to market-oriented activities increased. Over this same period there were significant reductions in mortality, especially among the young, and impressive reductions in morbidity. This paper considers all these trends jointly, modeling the changes in fertility, child schooling and lifetime married female labor supply as a consequence of exogenous changes in health. These interactions are then quantified using calibration techniques. The simulations suggest that reductions in child mortality alone cannot explain the transformation of the American family. Indeed, in our preferred calibration, reductions in child mortality lead to a modest decline in human capital and increase in fertility, with little effect on married female labor force involvement. In sharp contrast, reductions in morbidity are found to lower fertility and increase education. The time savings from lower fertility more than offset the increased time mothers invest in their childrens' quality, freeing some time for market work. Nevertheless, to quantitatively account for the increase in mother's time spent at work it proves necessary to generate further reductions in mother's household production time. In our framework this is driven by a narrowing of the gender wage gap. More generally, viewing the implications of health improvements deepens our understanding of the American family transformation, complementing explanations based on narrowing of the gender wage gap, skill biased technical change and changes in household technology.
    Keywords: Schooling, Fertility, Health, Human Capital Accumulation, Labor Supply
    JEL: D1 J13 I21 I10 J24 J22 N3
    Date: 2009–09–11
  18. By: Christian R. Østergaard; Bram Timmermans; Kari Kristinsson
    Abstract: This paper investigates the effect of employee diversity in terms of gender, age, ethnicity and education on the firm’s likelihood of introducing an innovation. The analysis draws on data from a recent innovation survey. This data is merged with a linked employer-employee dataset that allow us to identify the employee composition of each firm. We test the hypothesis that employee diversity is associated with better innovative performance. The econometric analysis reveals positive, negative and non-significant effects of the different employee characteristics on the likelihood of introducing an innovation.
    Keywords: Diversity, Innovation, Education, Gender, Cultural Backgrund
    JEL: A
    Date: 2009

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