nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2010‒01‒16
twelve papers chosen by
Fabio Sabatini
University of Siena

  1. Time-separable Utility, Leisure and Human Capital Accumulation: What New Implications for the Environment-Growth Nexus? By Xavier Pautrel
  2. Quick Job Entry or Long-Term Human Capital Development? The Dynamic Effects of Alternative Training Schemes By Osikominu, Aderonke
  3. Government and human capital in a model of development through modernization and specialization By Yuki, Kazuhiro
  4. Offshoring and Occupational Specificity of Human Capital By Ritter, Moritz
  5. Firms' Main Market, Human Capital and Wages By Alcala, Francisco; Hernandez, Pedro J.
  6. Skilled migration and education policies: Is there still scope for a Bhagwati tax? By Scalera, Domenico
  7. Education inequality, economic growth, and income inequality: Evidence from Indonesia, 1996-2005 By Digdowiseiso, Kumba
  8. The Roles of Formal Schooling in Workers' Job Self-selection and Income in Village-based Industrial Clusters: The Cases of Two Clusters in Northern Vietnam. By Vu Hoang Nam; Dao Ngoc Tien; Phan Thi Van
  9. Was there a Skills Shortage in Australia? By Junankar, Pramod N. (Raja)
  10. Life-Cycle Patterns in Male/Female Differences in Job Search By Kunze, Astrid; Troske, Kenneth
  11. Personality and Career - She's Got What It Takes By Simon Fietze; Elke Holst; Verena Tobsch
  12. The School Going Child Worker: An Analysis of Poverty, Asset Inequality and Child Education in Rural India By Chaudhuri, Sanjukta

  1. By: Xavier Pautrel (Nantes Atlantique Université Laboratoire d’Économie et de Management de Nantes (LEMNA), Institut d’Économie et de Management de Nantes - IEA)
    Abstract: Using a time-separable utility function where leisure is introduced through the disutility of working time and is adjusted for quality, as measured by human capital to capture home production, we demonstrate that the environmental policy is harmful for growth. A tighter environmental tax reduces the incentives to educate by increasing leisure time and lowers the steady-state growth rate and lifetime welfare, whatever the source of pollution. We also demonstrate that the intertemporal elasticity of substitution in labor supply plays a crucial role in the marginal impact of the environmental tax on growth and welfare. When the positive influence of human capital is added into preferences (by explicitly modelling the home production sector), we find that the environmental policy promotes steady-state growth. This result challenges the finding by Hettich (1998) according to which, in the presence of leisure, the environmental tax does not affect human capital accumulation if the source of pollution is output.
    Keywords: Leisure, Human Capital, Environmental Tax
    JEL: C Q56
    Date: 2009–11
  2. By: Osikominu, Aderonke (University of Freiburg)
    Abstract: This study evaluates and compares the effectiveness of two alternative training schemes for the unemployed: short, job-search oriented training and long, human capital oriented training. We investigate the impact dynamics of these programs considering both unemployment and employment duration. Our analysis uses a rich administrative longitudinal data set for Germany where both programs were implemented at the same time. Our estimation strategy flexibly accounts for dynamic selection on observables and unobservables as well as heterogeneous treatment effects. The results indicate that short-term training schemes can be an effective tool to reduce unemployment in the long run, in particular if participation occurs early during unemployment. Long-term training schemes increase the average duration of employment spells more strongly than short-term training. However, they increase the expected unemployment duration if they are started early during unemployment. This negative short-run impact of long-term training is an important driver of its overall effectiveness.
    Keywords: training, program evaluation, duration analysis, dynamic treatment effects, multiple treatments, active labor market policy
    JEL: J64 C41 J68 I28
    Date: 2009–12
  3. By: Yuki, Kazuhiro
    Abstract: Economic development is associated with the shift of production from the traditional sector (e.g. traditional agriculture and the urban informal sector) to the modern sector (e.g. modern manufacturing and commercial agriculture). Human capital accumulation, particularly, education and job training of skilled workers, is a crucial factor in the modernization of an economy. Several institutions such as the protection of property rights and the strength of the rule of law also are considered essential. Thus, the government has an important role as the main provider of 'institution-maintaining' services, although it often faces a difficulty in providing adequate amounts of the services due to costly hiring of educated officers and tax avoidance. This paper analyzes interactions among taxation, the provision of the public services, human capital accumulation, and modernization, based on a dynamic dual economy model, which draws on the Becker and Murphy (1992) model of skill and task specialization, and examines conditions for successful development. Distributions of political power and wealth as well as sectoral productivities and the cost of education affect the outcome qualitatively. In particular, the socially desirable distribution of political power is such that educated (uneducated) individuals should have dominant power at an early (late) stage of development. Further, it is shown that several novel or overlooked inefficiencies arise naturally from realistic features of the model and appropriate redistribution can correct the inefficiencies except at a fairly early stage of development.
    Keywords: dual economy; government; human capital; inequality; overeducation; redistribution; specialization
    JEL: O11 O17 O15 H23
    Date: 2009–12
  4. By: Ritter, Moritz
    Abstract: This paper develops a dynamic general equilibrium model in which workers acquire human capital specific to the task they complete. The dynamic nature of the model allows for differentiation between short and long run effects of offshoring on productivity and labour market outcomes. The welfare effects of increased offshoring are unambiguously positive; their magnitude depends on the difference between autarky and world relative prices, but not on the skill-content of offshored and inshored tasks. For reasonable terms of trade, the steady state welfare gains are found to be between 1.8% and 4% in the calibrated model. The distribution of the gains from trade critically depends on the time horizon: in the short term, workers with human capital specific to the inshored occupations gain, while workers with human capital specific to the offshored occupations lose. In the long run, the gains from trade are equally distributed among ex-ante identical agents.
    Keywords: Offshoring; Sectoral Labour Reallocation; Human Capital
    JEL: F16 J62 E24 J24
    Date: 2009–12–30
  5. By: Alcala, Francisco; Hernandez, Pedro J.
    Abstract: Recent international trade literature emphasizes two features in characterizing the current patterns of trade: efficiency heterogeneity at the firm level and quality differentiation. This paper explores human capital and wage differences across firms in that context. We build a partial equilibrium model predicting that firms selling in more-remote markets employ higher human capital and pay higher wages to employees within each education group. The channel linking these variables is firms’ endogenous choice of quality. Predictions are tested using Spanish employer-employee matched data that classify firms according to four main destination markets: local, national, European Union, and rest of the World. Employees’ average education is increasing in the remoteness of firm’s main output market. Market–destination wage premia are large, increasing in the remoteness of the market, and increasing in individual education. These results suggest that increasing globalization may play a significant role in raising wage inequality within and across education groups.
    Keywords: vertical differentiation; exporters; Alchian-Allen effect; wage inequality; unobservable skills
    JEL: F16 J31 J24
    Date: 2009
  6. By: Scalera, Domenico
    Abstract: The Bhagwati brain drain tax proposal dating back to more than thirty years ago has been criticized from different viewpoints. In particular, recent literature has pointed out that this tax would hamper accumulation of human capital by reducing gains from skilled migration. In this paper, it is argued that when taking into account social externalities of human capital, and optimal policies implemented by a government caring only for left behind residents, a brain drain tax tends rather to foster the investment in human capital and increase residents’ income and welfare. The Bhagwati tax could even be universally welfare improving. In fact, if the tax is paid by migrants in addition to the ordinary income taxation, their larger fiscal burden might be outweighed by a higher human capital and gross income. Alternatively, if the transfer is financed by the destination country, its fiscal losses might be outweighed by the advantage of more skilled immigrants.
    Keywords: Skilled migration; education policies; Bhagwati tax
    JEL: O15 J24 H52
    Date: 2009–12–18
  7. By: Digdowiseiso, Kumba
    Abstract: Abstract This paper examines the determinants of economic growth, income inequality, and their relationship in the context of education inequality. The econometric results from a cross-section analysis of 23 provinces in the period of 1996-2005 indicate that a higher level of human capital and the relative dispersion of human capital have a disequalizing effect on the income distribution. It also confirms that economic growth has strongly and significantly equalizing effect on the income distribution, supporting the complementarity relationship between equity and growth. In addition, human capital investment contributes significantly to the growth of economy. Therefore, in a bid to achieve egalitarian society with a more equitable distribution of income, economic policies should be more targeted at not only more education but also equal access to education.
    Keywords: Education; Growth; Inequality; and Indonesia
    JEL: I30 I21 O40
    Date: 2009–12–20
  8. By: Vu Hoang Nam (Faculty of International Economics, Foreign Trade University, Vietnam); Dao Ngoc Tien (Faculty of Economics and International Business, Foreign Trade University, Vietnam); Phan Thi Van (Faculty of Economics and International Business, Foreign Trade University, Vietnam)
    Abstract: While village industries are known to play an important role in the development of rural areas in developing countries, little is known about village industries in transition economies. Also, little attention has been paid to the question of how human capital contributes to the choice of jobs and income of workers in these village industries. This paper inquires into the determinants of the workers' choice of jobs and income in two village-based industrial clusters in Northern Vietnam. We found that formal schooling plays an important role in the self-selection of jobs and income of workers in all of the villages.
    Keywords: Vietnam; Industrial cluster
    JEL: O14 O53
    Date: 2010
  9. By: Junankar, Pramod N. (Raja) (University of Western Sydney)
    Abstract: The paper analyses the problem of a "skills shortage" in Australia. It begins with an analysis of the operation of a labour market in terms of stocks and flows of labour services and human capital acquisition. It discusses the definition of a skills shortage, why it persists, and then looks at evidence from Australia, in particular, the resource rich states of Queensland and Western Australia over the past decade. It discusses possible employer responses to a skills shortage. Finally, it discusses whether the government should intervene, and if so what policies may help to relieve a skills shortage.
    Keywords: skill shortages, wage adjustments, migrants
    JEL: J24 J31 J48
    Date: 2009–12
  10. By: Kunze, Astrid (Norwegian School of Economics and Business Administration); Troske, Kenneth (University of Kentucky)
    Abstract: We investigate whether women search longer for a job than men and whether these differences change over the life cycle. Our empirical analysis exploits German register data on highly attached displaced workers. We apply duration models to analyze gender differences in job search taking into account observed and unobserved worker heterogeneity and censoring. Simple survival functions show that displaced women take longer to find a new job than comparable men. Disaggregation by age groups reveals that these differences are driven by differential behavior of prime age women. There is no significant difference in job search duration among the very young and older workers. These differential outcomes remain even after we control for differences in human capital, and when time dependence and unobserved heterogeneity are incorporated into the model.
    Keywords: gender differences, job search, displaced workers, wage differences, discrimination
    JEL: J31 J63 J64 J71
    Date: 2009–12
  11. By: Simon Fietze; Elke Holst; Verena Tobsch
    Abstract: The female share in management positions is quite low in Germany. The higher the hierarchical level, the fewer women there are in such positions. Men have numerous role models to follow whereas women lack this opportunity: In the executive boards of the top 200 private companies in Germany, only 2.5 percent of members are female. Many studies have focused on the influence of human capital and other "objective" factors on career opportunities. In our study, we go a step further by also looking at the impact of self-reported personality traits on gender differences in career chances. We compare managers and other white-collar employees in Germany's private sector. While bivariate results based on data from the German Socio-Economic Panel (SOEP) in 2005 show that there are significant gender differences in personality traits, multivariate estimations clearly indicate that these differences cannot account for gender differences in career opportunities. Nevertheless, personality traits might indeed play a role, albeit more indirectly: Some of the stronger career effects, such as work experience, long working hours, and labour market segregation, can also reflect differences in personality traits. These might have been influenced at an early stage by a gender-biased environment. Our results strongly stress the need for a gender-neutral environment outside and inside companies in order to enforce equal career opportunities for women and men.
    Keywords: personality, gender, career, leadership
    JEL: J16 M12
    Date: 2009
  12. By: Chaudhuri, Sanjukta
    Abstract: In examining child work and education in rural India, I find that Parental education and hours of non household child work demonstrate a U shaped relationship. I contend this is due to weak labor markets for skilled workers in rural India that creates a “high education trap.” This results in poverty and perpetuation of child work in households with highly educated parents. School attendance is feasible even for child workers, but is conditional on continuity of enrollment. At 30 hours of non household work per week, school enrollment in the previous year ensures that the probability of attendance in the current year is 93 percent.
    Keywords: Child work; Child labor; Child education; Rural India; Poverty; Gender discrimination.
    JEL: D13 O53 J21 I32
    Date: 2009–09–01

This nep-hrm issue is ©2010 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.