nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒11‒27
nine papers chosen by
Fabio Sabatini
University of Siena

  1. Human Capital Spillovers Productivity and Regional Convergence in Spain By Raul Ramos; Manuel Artís; Jordi Suriñach
  2. Investing in People for the 21st Century By Huffman, Wallace
  3. The Impact of Training on Productivity and Wages: Firm Level Evidence By Konings, Jozef; Vanormelingen, Stijn
  4. The Economics and Psychology of Inequality and Human Development By Flavio Cunha; James J. Heckman
  5. Catch Me If You Can: Education and Catch-up in the Industrial Revolution By Becker, Sascha O.; Hornung, Erik; Woessmann, Ludger
  6. Taxation of Human Capital and Wage Inequality: A Cross-Country Analysis By Fatih Guvenen; Burhanettin Kuruscu; Serdar Ozkan
  7. Low-Skilled Immigrant Entrepreneurship By Lofstrom, Magnus
  8. Estimating the Effects of Lenght of Exposure to Traning Program: The Case of Job Corps By Carlos A. Flores; Alfonso Flores-Lagunes; Arturo Gonzalez; Todd C. Neumann
  9. Trade, Technology and Skills: Evidence from Turkish Microdata By Elena Meschi; Erol Taymaz; Marco Vivarelli

  1. By: Raul Ramos (Faculty of Economics, University of Barcelona); Manuel Artís (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: This paper analyses the differential impact of human capital, in terms of different levels of schooling, on regional productivity and convergence. The potential existence of geographical spillovers of human capital is also considered by applying spatial panel data techniques. The empirical analysis of Spanish provinces between 1980 and 2007 confirms the positive impact of human capital on regional productivity and convergence, but reveals no evidence of any positive geographical spillovers of human capital. In fact, in some specifications the spatial lag presented by tertiary studies has a negative effect on the variables under consideration.
    Keywords: Regional convergence, productivity, human capital composition, geographical spillovers.
    Date: 2009–11
  2. By: Huffman, Wallace
    Abstract: The paper draws upon the work of T.W. Schultz to show that human capital theory and labor market adjustments have important implications for investing in people for the 21st Century.
    Keywords: Human Capital, education, twenty-first century, global labor markets
    JEL: A0
    Date: 2009–11–19
  3. By: Konings, Jozef; Vanormelingen, Stijn
    Abstract: This paper uses firm level panel data of firm 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: Human Capital; Production Functions; Training
    JEL: J24 J31 L22
    Date: 2009–09
  4. By: Flavio Cunha (Department of Economics, University of Pennsylvania); James J. Heckman (Department of Economics, University of Chicago; University College Dublin; American Bar Foundation; Cowles Foundation, Yale University)
    Abstract: Recent research on the economics of human development deepens understanding of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequalities in family environments and investments in children are substantial. They causally affect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for different outcomes. An empirically determined technology of capability formation reveals that capabilities are self-productive and cross-fertilizing and can be enhanced by investment. Investments in capabilities are relatively more productive at some stages of a child's life cycle than others. Optimal child investment strategies differ depending on target outcomes of interest and on the nature of adversity in a child's early years. For some configurations of early disadvantage and for some desired outcomes, it is efficient to invest relatively more in the later years of childhood than in the early years.
    Keywords: inequality, capabilities, noncognitive traits, human development, technology of capability formation, policy targeting
    JEL: A12
    Date: 2009–11–13
  5. By: Becker, Sascha O. (University of Stirling); Hornung, Erik (Ifo Institute for Economic Research); Woessmann, Ludger (Ifo Institute for Economic Research)
    Abstract: Existing evidence, mostly from British textile industries, rejects the importance of formal education for the Industrial Revolution. We provide new evidence from Prussia, a technological follower, where early-19th-century institutional reforms created the conditions to adopt the exogenously emerging new technologies. Our unique school-enrollment and factory-employment database links 334 counties from pre-industrial 1816 to two industrial phases in 1849 and 1882. Controlling extensively for pre-industrial development, we use pre-industrial education as an instrument to identify variation in later education that is exogenous to industrialization itself. We find that basic education significantly accelerated non-textile industrialization in both phases of the Industrial Revolution.
    Keywords: human capital, industrialization, Prussian economic history
    JEL: N13 N33 I20 O14
    Date: 2009–11
  6. By: Fatih Guvenen; Burhanettin Kuruscu; Serdar Ozkan
    Abstract: Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts. We begin by documenting two new empirical facts that link these inequality differences to tax policies. First, we show that countries with more progressive labor income tax schedules have significantly lower before-tax wage inequality at different points in time. Second, progressivity is also negatively correlated with the rise in wage inequality during this period. We then construct a life cycle model in which individuals decide each period whether to go to school, work, or be unemployed. Individuals can accumulate skills either in school or while working. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Progressive taxation compresses the (after-tax) wage structure, thereby distorting the incentives to accumulate human capital, in turn reducing the cross-sectional dispersion of (before-tax) wages. We find that these policies can account for half of the difference between the US and the CEU in overall wage inequality and 76% of the difference in inequality at the upper end (log 90-50 differential). When this economy experiences skill-biased technological change, progressivity also dampens the rise in wage dispersion over time. The model explains 41% of the difference in the total rise in inequality and 58% of the difference at the upper end.
    JEL: E62 H2 J24 J31
    Date: 2009–11
  7. By: Lofstrom, Magnus (Public Policy Institute of California)
    Abstract: More than half of the foreign born workforce in the U.S. have no schooling beyond high school and about 20 percent of the low-skilled workforce are immigrants. More than 10 percent of these low-skilled immigrants are self-employed. Utilizing longitudinal data from the 1996, 2001 and 2004 Survey of Income and Program Participation panels, this paper analyzes the returns to self-employment among low-skilled immigrants. We compare annual earnings and earnings growth of immigrant entrepreneurs to immigrants in wage/salary employment as well as native born business owners. We find that the returns to low-skilled self-employment among immigrants is higher than it is among natives but also that wage/salary employment is a more financially rewarding option for most low-skilled immigrants. An exception is immigrant men, who are found to have higher earnings growth than immigrants in wage/salary employment and are predicted to reach earnings parity after approximately 10 years in business. We also find that most of the 20 percent male native-immigrant earnings gap among low-skilled business owners can be explained primarily by differences in the ethnic composition. Low-skilled female foreign born entrepreneurs are found to have earnings roughly equal to those of self-employed native born women.
    Keywords: immigrants, low-skill, earnings, self-employment, entrepreneurship
    JEL: J15 J16 J31 L26
    Date: 2009–11
  8. By: Carlos A. Flores (Department of Economics, University of Miami); Alfonso Flores-Lagunes (Food and Resource Economics Department, University of Florida and IZA, Bonn, Germany); Arturo Gonzalez (Ernst & Young and IZA, Bonn, Germany); Todd C. Neumann (School of Social Sciences, Humanities & Arts, University of California, Merced)
    Abstract: Length of exposure to a training program is important in determining the labor market outcomes of participants. Employing methods to estimate the causal effects from continuous treatments, we provide insights regarding the effects of different lengths of enrollment to Job Corps (JC)— America’s largest and most comprehensive job training program for disadvantaged youth. We semiparametrically estimate average causal effects (on the treated) of different lengths of exposure to JC, using the “generalized propensity score” under the assumption that selection into different lengths is based on a rich set of observed covariates. “Placebo tests” are performed to gauge the plausibility of this assumption. We find that the estimated effects are increasing in the length of training, and that the marginal effects of additional training are decreasing with length of enrollment. We also document differences in the estimated effects of length of exposure across different demographic groups, which are particularly large between males and females. Finally, our results suggest an important “lock-in” effect in JC training.
    Keywords: Training Programs, Continuous Treatments, Generalized Propensity Score, Dose-Response Function
    JEL: I38 C21 J24
    Date: 2009–03
  9. By: Elena Meschi (CEE, Institute of Education, University of London); Erol Taymaz (Department of Economics, Middle East Technical University, Ankara); Marco Vivarelli (Universita Cattolica del Sacro Cuore, Milano; Institute for the Study of Labour (IZA), Bonn; Max Planck Institute of Economics, Jena; Centre for the Study of Globalisation and Regionalisation (CSGR), Warwick University)
    Abstract: In this paper we report evidence on the relationship between trade openness, technology adoption and the relative demand for skilled labour in the Turkish manufacturing sector, using firm level data over the period 1980-2001. In a dynamic panel data setting, using a unique database comprising data from 17,462 firms, we estimate an augmented cost share equation whereby the wage bill share of skilled workers in a given firm is related to international exposure and technology adoption. Both at the sectoral and firm level, it emerged that R&D expenditures are positive and significantly related to skill upgrading. This result supports the skill biased technological change argument in the case of a middle-income country such as Turkey. Moreover, the sectoral analysis revealed that increasing export towards more industrialised countries (mainly the E.U.) tends to shift the production toward less skill-intensive activities. While this result is consistent with the HOSS theorem, on the other hand import penetration from more developed countries turns out to facilitate the adoption of new technologies embodied in capital and intermediate goods, thus shifting the production toward more skill-intensive technologies. This result is confirmed by the firm level analysis that finds a positive impact of technological transfer from abroad, foreign ownership and export on the demand for skills, highlighting the role of increasing globalisation in fostering skill upgrading within firms. Our microdata also allowed us to investigate the direct impact of import flows in shaping the relative demand for skills. The results showed that those firms belonging to the sectors that most raised their inputs from more developed countries also experienced a higher increase in their labour cost share of skilled workers. This finding is a further support to the hypothesis that imports from industrialised countries imply a transfer of new technologies, in turn leading to a higher demand for skilled labour.
    Keywords: globalization, technology transfer, skills, panel data, GMM-SYS
    JEL: F16 O15 O33
    Date: 2009–11–18

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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