nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2010‒01‒23
six papers chosen by
Fabio Sabatini
University of Siena

  1. Policies to Create and Destroy Human Capital in Europe By Heckman, James J.; Jacobs, Bas
  2. Measuring gini coefficient of education: the Indonesian cases By Digdowiseiso, Kumba
  3. Years of Schooling, Human Capital and the Body Mass Index of European Females By Brunello, Giorgio; Fabbri, Daniele; Fort, Margherita
  4. Heterogeneity, trust, human capital and productivity growth: Decomposition analysis By Yamamura, Eiji; Shin, Inyong
  5. What Causes Gender Differences in the Participation and Intensity of Lifelong Learning? By Peter Huber; Ulrike Huemer
  6. Capital-Skill Complimentarity: Evidence from Manufacturing Industries in Ghana By Akay, Gokhan H.; Yuksel, Mutlu

  1. By: Heckman, James J. (University of Chicago); Jacobs, Bas (Erasmus University Rotterdam)
    Abstract: Trends in skill bias and greater turbulence in modern labor markets put wages and employment prospects of unskilled workers under pressure. Weak incentives to utilize and maintain skills over the life-cycle become manifest with the ageing of the population. Reinvention of human capital policies is required to avoid increasing welfare state dependency among the unskilled and to reduce inefficiencies in human capital formation. Policy makers should acknowledge strong dynamic complementarities in skill formation. Investments in the human capital of children should expand relative to investment in older workers. There is no trade-off between equity and efficiency at early ages of human development but there is a substantial trade-off at later ages. Later remediation of skill deficits acquired in early years is often ineffective. Active labor market and training policies should therefore be reformulated. Skill formation is impaired when the returns to skill formation are low due to low skill use and insufficient skill maintenance later on in life. High marginal tax rates and generous benefit systems reduce labor force participation rates and hours worked and thereby lower the utilization rate of human capital. Tax-benefit systems should be reconsidered as they increasingly redistribute resources from outsiders to insiders in labor markets which is both distortionary and inequitable. Early retirement and pension schemes should be made actuarially fairer as they entail strong incentives to retire early and human capital is thus written off too quickly.
    Keywords: family policy, (non)cognitive skills, returns to education, inequality, dynamic complementarity, training, retirement, labor supply, human capital, skill formation, training policy, active labor market policy, tax, pension, benefit systems, welfare state
    JEL: H2 H5 I2 I3 J2 J3
    Date: 2009–12
  2. By: Digdowiseiso, Kumba
    Abstract: While income inequality in third world countries has aggressively been commented and studied extensively, little analysis is relatively available on measuring inequality in other dimensions of human development. The main findings suggest that inequality in education as measured by education Gini is negatively associated with average years schooling, implying that higher education attainments are more likely to achieve equality in education. Moreover, a clear pattern on an education Kuznets curve exists if standard deviation of schooling is used. Furthermore, gender gaps are related to education inequality and the relation between these variables become stronger over time.
    Keywords: Education; Inequality; Indonesia
    JEL: A20 I21
    Date: 2010–01–09
  3. By: Brunello, Giorgio (University of Padova); Fabbri, Daniele (University of Bologna); Fort, Margherita (University of Bologna)
    Abstract: We use the compulsory school reforms implemented in European countries after the II World War to investigate the causal effect of education on the Body Mass Index (BMI) and the incidence of overweight and obesity among European females. Our IV estimates suggest that years of schooling have a protective effect on BMI. The size of the estimated effect is not negligible but smaller than the one found in comparable recent work for the US. We depart from the current empirical literature in three main directions. First, we use a multi-country approach. Second, we complement the standard analysis of the causal impact of years of schooling on BMI with one relying on a broader measure of education, i.e. individual standardized cognitive tests, and show that the current focus in the literature on years of schooling as the measure of education is not misplaced. Last, we evaluate whether the current focus on conditional mean effects should be integrated with an approach which allows for heterogeneous responses to changes in compulsory education. Although our evidence based on quantile regressions is mixed, there is some indication that the protective effect of schooling does not increase monotonically from the lower to the upper quantile of the distribution of BMI. Rather, the marginal effect is stronger among overweight (but not obese) females than among females with BMI above 30.
    Keywords: obesity, human capital, Europe
    JEL: I12 I21
    Date: 2009–12
  4. By: Yamamura, Eiji; Shin, Inyong
    Abstract: This paper uses panel data from Japan to decompose productivity growth measured by the growth of output per labor unit into three components of efficiency improvement, capital accumulation and technological progress. It then examines their determinants through a dynamic panel model. In particular, this paper focuses on the question of how inequality, trust and humans affect the above components. The main findings derived from empirical estimations are: (1) Inequality impedes not only improvements in efficiency but also capital accumulation. (2) A degree of trust promotes efficiency improvements and capital accumulation at the same time. However, human capital merely enhances improvements in efficiency.
    Keywords: Heterogeneity; Inequality; Trust; Data envelopment analysis
    JEL: E25 O15 O40
    Date: 2010–01–15
  5. By: Peter Huber (WIFO); Ulrike Huemer (WIFO)
    Abstract: We use recent advances in the statistical analysis of Oaxaca-Blinder decompositions for non-linear models to analyse the contribution of individual variables to total gender differences in participation and duration of training. Results suggest that effects stemming from the intra-household division of labour contribute significantly to gender differences, but that segregation of the labour market as well as differences in the access to training by tenure, age, occupation, profession and sectors are more important.
    Keywords: gender differences, training
    Date: 2009–12–10
  6. By: Akay, Gokhan H. (Trinity University); Yuksel, Mutlu (IZA)
    Abstract: Using U.S. manufacturing data, Griliches (1969) found evidence suggesting that capital equipment was more substitutable for unskilled than skilled labor. Griliches formulated this finding as the capital-skill complementarity hypothesis. The purpose of this study is to determine whether the capital-skill complementarity framework holds for Ghana manufacturing plants in industry and aggregate level. We use an unbalanced panel of plant-level data for manufacturing firms in Ghana during the 1991 and 1997 in four industries (food-bakery, textiles-garments, wood-furniture and metal-machinery). Our findings suggest that capital-skill complimentarity holds in aggregate level and wood-furniture sector in Ghana. However, we reject the capital-skill complementarity hypothesis for food-bakery, textile-garment and metal-machinery sectors.
    Keywords: capital-skill complementarity, elasticity of substitution, translog cost function
    JEL: J30 O55
    Date: 2009–12

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