nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2010‒09‒11
seventeen papers chosen by
Fabio Sabatini
Euricse and University of Trento

  1. Economic freedom, human rights, and the returns to human capital : an evaluation of the Schultz hypothesis By King, Elizabeth M.; Montenegro, Claudio E.; Orazem, Peter F.
  2. The creative intelligence By Kaies Samet
  3. Geographic Macro and Regional Model for EU Policy Impact Analysis of Intangible Assets and Growth By Attila Varga; Péter Járosi; Tamás Sebestyén
  4. Market imperfections and firm-sponsored training By Matteo PICCHIO; Jan C. VAN OURS
  5. EU Policies and African Human Capital Development By Yaw Nyarko
  6. Female Entrepreneurship in Developing Countries By Minniti, Maria; Naudé, Wim
  7. Left Behind: Intergenerational Transmission of Human Captial in the Midst of HIV/AIDS By Mevlude Akbulut-Yuksel; Belgi Turan
  8. Higher Education and Economic Development in Africa: a Review of Channels and Interactions. By Francis Teal
  9. Labor-Market Attachment and Training Participation By Ikenaga, Toshie; Kawaguchi, Daiji
  10. Is foreign trade important for regional growth? Empirical evidence from Portugal By Elias Soukiazis; Micaela Antunes
  11. Enhancing Interns’ Aspirations towards the Labour Market through Skill-Acquisition: The Second Chance Schools Experience By Fabio Aricò; Laurence Lasselle
  12. New Evidence on the Role of Cognitive Skill in Economic Development By Eduardo de Carvalho Andrade; Márcio Laurini
  13. Do Natural Disasters Affect Human Capital? An Assessment Based on Existing Empirical Evidence By Baez, Javier E.; de la Fuente, Alejandro; Santos, Indhira
  14. Can Educational Expansion Improve Income Inequality in China? Evidences from the CHNS 1997 and 2006 Data By Ning, Guangjie
  15. Migration, Skill Composition and Growth By Lotti, E.; Young-Bae, K.; , Levine; P.,
  16. Job Assignment with Multivariate Skills By Stefanie Brilon
  17. Skills Demand and Utilisation: An International Review of Approaches to Measurement and Policy Development By John Buchanan; Linda Scott; Serena Yu; Hanna Schutz; Michelle Jakubauskas

  1. By: King, Elizabeth M.; Montenegro, Claudio E.; Orazem, Peter F.
    Abstract: According to T.W. Schultz, the returns to human capital are highest in economic environments experiencing unexpected price, productivity, and technology shocks that create"disequilibria."In such environments, the ability of firms and individuals to adapt their resource allocations to shocks becomes most valuable. In the case of negative shocks, government policies that mitigate the impact of the shock will also limit the returns to the skills of managing risk or adapting resources to changing market forces. In the case of positive shocks, government policies may restrict access to credit, labor, or financial markets in ways that limit reallocation of resources toward newly emerging profitable sectors. This paper tests the hypothesis that the returns to skills are highest in countries that allow individuals to respond to shocks. Using estimated returns to schooling and work experience from 122 household surveys in 86 developing countries, this paper demonstrates a strong positive correlation between the returns to human capital and economic freedom, an effect that is observed throughout the wage distribution. Economic freedom benefits those workers who have attained the most schooling as well as those who have accumulated the most work experience.
    Keywords: Debt Markets,Political Economy,Economic Theory&Research,Labor Policies,Population Policies
    Date: 2010–08–01
  2. By: Kaies Samet (R.U.E.D - Research Unit in Economy of Development - Faculty of Economic Sciences and Management of Sfax)
    Abstract: The creative intelligence lies in the framework of the "intelligent" way which must be used to assure creativity and, thus, innovation. As its name suggests, the creative intelligence excludes imitation. Therefore, firstly, it requires an important R&D investment that manifests itself in the developed countries. The resulting technological change seems to be a necessary but insufficient condition to assure innovation. Indeed, two other factors are necessary for that: the patent, as a form of protection of the rights of intellectual property, and the human capital (and thus education). The resulting innovation can be of two forms: either horizontal or vertical, though more interest should be given to vertical innovations since there is a priority of households for quality.
    Keywords: R&D; horizontal innovation; vertical innovation; technological obsolescence; creative destruction
    Date: 2010–08–30
  3. By: Attila Varga (Department of Economics and Regional Studies, University of Pécs); Péter Járosi (Department of Economics and Regional Studies, University of Pécs); Tamás Sebestyén (Department of Economics and Regional Studies, University of Pécs)
    Abstract: This paper introduces the geographic macro and regional model for NUTS-2 regions of the Euro zone. This model consists of three blocks: the TFP, the SCGE and the MACRO blocks. The model is built for impact analysis of policies targeting intangible assets in the forms of R&D, human capital and social capital. The analysis can be done both at the regional and the EU macroeconomic levels. Policy simulations illustrate the capabilities of the complex model system.
    Keywords: TFP, SCGE models, DSGE models, impact analysis, R&D, human capital, social capital
    JEL: O31 H41 O40
    Date: 2010–06
  4. By: Matteo PICCHIO (Department of Economics, Tilburg University and IZA); Jan C. VAN OURS (Department of Economics and CentER, Tilburg University, Department of Economics, University of Melbourne; IZA and CEPR)
    Abstract: Recent human capital theories predict that labor market frictions and product market competition influence firm-sponsored training. Using matched worker-firm data from Dutch manufacturing, our paper empirically assesses the validity of these predictions. We find that a decrease in labor market frictions significantly reduces firms’ training expenditures. Instead, product market competition does not have an effect on firm-sponsored training. We conclude that increasing competition through international integration and globalization does not pose a threat to investments in on-the-job training. An increase in labor market flexibility may reduce incentives of firms to invest in training, but the magnitude of this effect is small.
    Keywords: firm-sponsored training, labor market frictions, product market competition, matched worker-firm data
    JEL: D43 J24 J42 L22 M53
    Date: 2010–08–16
  5. By: Yaw Nyarko
    Abstract: Brain Circulation between the European Union (EU) and Sub-Saharan Africa is a crucial ingredient in Human Capital formation in the latter. A major constraint to African development is the very low base of skilled and highly educated workers and professionals. The production of skilled workers has been low, and only recently has seen a dramatic increase. Recent papers by many authors have indicated that a channel for human capital growth has been, paradoxically, the possibility of the brain drain which serves as both an incentive mechanism and which results in higher human capital when the drainers return. After a review of some of the literature, these insights are applied to the debates raging today on European Union migration policy: the Blue Card, Migration Con-tracts, anti-Brain Drain legislation, etc. This paper argues that a careful calibration of the EU policies may enable faster Human Capital growth in Africa, while, at the same time, being beneficial to the EU by supplying critically needed skills into the EU economy. By carefully planning the production of human capital and the consequent flow of skilled migrants into Europe, the EU can assist in the development of vitally needed numbers of trained or skilled workers in Africa.
    Date: 2010–04–15
  6. By: Minniti, Maria; Naudé, Wim
    Keywords: Women, Entrepreneurship, Developing Countries
    Date: 2010
  7. By: Mevlude Akbulut-Yuksel; Belgi Turan (Department of Economics, Dalhousie University; Department of Economics, University of Houston)
    Keywords: HIV/AIDS, Intergenerational Transmission; Human Capital Investment; JEL: O12, I1, I2
    Date: 2010–09–03
  8. By: Francis Teal
    Abstract: While the numbers with completed tertiary level education are low in Africa, both relative to other countries and in absolute terms, they have been growing very rapidly. Three questions are addressed in this paper. The first is how higher education links to other forms of capital accumulation in a process that leads to economic growth. The second is how higher education links to job outcomes in particular the role of the public sector and self-employment as outcomes for graduates. The third is whether and how an expansion of skilled jobs can create its own demand. The paper draws on both macro and micro evidence to answer those questions which are placed in a long run historical context. It is argued that growth has been more closely linked to investment in physical capital than in education and this may well reflect the fact that education is most valuable when it is linked to technology which requires higher skills. Data from thirty two African countries are used to show that the returns to education, measured both by macro production functions and by micro earning functions, are highest for those with higher levels of education. A contrast is drawn between the role of higher education in providing access to public sector employment and the increasing importance of self-employment in Africa. The paper concludes by asking whether Africa can use its investment in higher skilled labour to effect a service based growth revolution.
    Date: 2010
  9. By: Ikenaga, Toshie; Kawaguchi, Daiji
    Abstract: This paper examines how expected attachment to the labor market and expected tenure at a specific firm affect training participation. The results, based on cross-sectional data from Japan, indicate that expected attachment to the labor market affects participation in both employer- and worker-initiated training, while expected tenure at a specific firm mainly explains participation in employer-initiated training. These two attachment indices explain almost half of the gender gap in training participation. Employers in a less competitive labor market are more likely to offer employer-initiated training to their workers.
    Date: 2010–07
  10. By: Elias Soukiazis (GEMF/Faculdade de Economia, Universidade de Coimbra, Portugal); Micaela Antunes (Faculdade de Economia, Universidade de Coimbra, Portugal)
    Abstract: Both the neoclassical approach associated to the Solow’s exogenous growth model and the endogenous growth theories have been criticised for being more consistent with a closed economy. In these approaches, the effects of international trade on growth and the trade deficits are not explicitly considered as impediments to economic expansion. The aim of this study is to contribute to the debate, investigating whether openness, exports share or trade balances affect regional growth in Portugal. In combination with external trade indicators, human capital is also considered as a conditional factor to growth, expressed by the rate of success in high school education. Thus, we analyse whether the combination of international trade measures and human capital is relevant to explaining regional growth in Portugal and how it affects the convergence process between regions. Additionally, interaction terms are considered to explore the existence of different performances between regions of the Littoral and the Interior zones. As an alternative to the traditional approach that considers the population growth rate, we include the share of the industrial employment as an indicator of regional specialisation. The empirical analysis estimates the conditional convergence model of the Barro’s type, applied to the Portuguese NUTS3 regions for the period 1996-2005. The estimation approach based on regional panel data and using the GMM estimation technique reveals that factors associated to external trade, human capital and reallocation of resources to more productive sectors (industry) are relevant to explain regional growth and convergence in Portugal.
    Keywords: conditional convergence, human capital, external trade, employment share in industry, GMM regressions, panel data.
    JEL: E12 F43 O11
    Date: 2010–07
  11. By: Fabio Aricò; Laurence Lasselle
    Abstract: Second Change School programmes are active in a number of European countries. These schools offer vulnerable young adults an alternative opportunity to enhance their employability skills by alternating education with work experience. People enrolling in these programmes disengaged from schools at an early age. They already experienced or are at-risk to enter into unemployment. This paper examines the impact of the Second Chance Schools on their participants’ aspirations towards the labour market through skill-acquisition. We are able to identify the perception of Second Chance Schools’ interns regarding entry to the professional life. A third of them, for example, consider their attitude or their surroundings as a barrier preventing them from getting a job. However, our results emphasise the role of the interns’ coach in improving their aspirations towards the labour market. We also show that when compared to male interns, female interns have a stronger (positive) perception of the school as a place where they can gain skills.
    Keywords: Employability, Training, Alternative Education, Aspirations.
    JEL: I21
    Date: 2010–06
  12. By: Eduardo de Carvalho Andrade (Insper Institute of Education and Research); Márcio Laurini (IBMEC Business School)
    Abstract: This paper presents new evidence on the role of cognitive skills in promoting economic growth rate. The novelties in this paper are that we use a within country dataset (Brazilian state and municipality levels data) and a new methodology, a nonparametric kernel regression estimation with mixed data. The main findings are the following: (i) there is strong evidence that the cognitive skill explains growth, but its relationship with growth appears to be non-linear, (ii) the quantity of schooling remains significant even after controlling for the quality of schooling, and (iii) there is support to the hypothesis that the effect of the cognitive skill on growth is important in an open environment.
    Keywords: Cognitive Skill, Nonparametric Kernel Regression
    Date: 2010–09–01
  13. By: Baez, Javier E. (World Bank); de la Fuente, Alejandro (World Bank); Santos, Indhira (BRUEGEL)
    Abstract: The last few years have seen a notable increase in the number of studies investigating the causes and effects of natural disasters in many dimensions. This paper seeks to review and assess available empirical evidence on the ex-post microeconomic effects of natural disasters on the accumulation of human capital, focusing on consumption, nutrition, education and health, including mental health. Three major findings come forward from this work. First, disasters appear to bring substantial damages to human capital, including death and destruction, and produce deleterious consequences on nutrition, education, health and many income-generating processes. Furthermore, some of these detrimental effects are both large and long-lasting. Second, there is a large degree of heterogeneity in the size – but not much in the direction – of the impacts on different socioeconomic groups. Yet, an empirical regularity across natural hazards is that the poorest carry the heaviest burden of the effects of disasters across different determinants and outcomes of human capital. Finally, although the occurrence of natural hazards is mostly out of control of authorities, there still is a significant room for policy action to minimize their impacts on the accumulation of human capital. We highlight the importance of flexible safety nets as well as the double critical role of accurate and reliable information to monitor risks and vulnerabilities, and identify the impacts and responses of households once they are hit by a disaster. The paper also lays out existing knowledge gaps, particularly in regard to the need of improving our understanding of the impacts of disasters on health outcomes, the mechanisms of transmission and the persistence of the effects in the long-run.
    Keywords: natural disasters, human capital accumulation
    JEL: I00 O10 O15
    Date: 2010–09
  14. By: Ning, Guangjie (Nankai University)
    Abstract: Rapid education expansion and rising income inequality are two striking phenomena occurring in China during the transitional period. Using the China Health and Nutrition Survey (CHNS) data collected in 1997 and 2006, this paper studies how education affects individual earnings during the transitional process. We find that education accounts for only a small fraction of personal earnings and income gap between different groups. We analyze the underlying mechanism of the impact of education on earnings. More educated people tend to enter state-owned sectors, have a low probability of changing jobs in the labor market and work less time; all of these will have a pronounced impact on earning and income inequality. Quantile regression analysis shows that the low-income group's education return rate is lower, which helps little in narrowing income gap. We decompose the earning gap into four factors: population effect, price effect, labor choice effect and unobservable effect. In explaining the earning gap in China, the price effect is more important than the population effect. The labor choice effect is also significant. We conclude that increasing educational expenditure with no complementary measures such as reforming the education system and establishing a competitive labor market helps less in reducing income inequality.
    Keywords: education expansion, income gap, rate of return to education, labor market
    JEL: I20 J31 O15
    Date: 2010–08
  15. By: Lotti, E.; Young-Bae, K.; , Levine; P.,
    Abstract: The UK, with its relatively liberal immigration policies following recent enlargements, has been one of the main recipients of migrants from new EU member states. This paper poses the questions: what is the effect of immigration on a receiving economy such as the UK? Is the effect beneficial or adverse for growth? How differently would skilled (or unskilled) migration affect both receiving and sending economies? What factors would contribute to immigration/emigration benefits/costs and economic growth driven by migration? Who are the winners and losers in both the sending and host regions? We utilize an endogenous growth two-bloc model with labour mobility of different skill compositions to address these questions. We show that migration, in general, is beneficial to the receiving country and increases the world growth rate. With remittances, the sending country in aggregate can also benefit. The only exception is in the case of unskilled migration, which can actually have a detrimental impact on the world growth rate. Winners are migrants, and the skill group in the region that sees its relative size decrease. <br><br> Keywords; Migration, Labour mobility, Skill composition, Economic growth. <br><br> JEL Classification: F22, F43, J24, J61, O41
    Date: 2010–08–01
  16. By: Stefanie Brilon (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: This paper analyzes the job assignment problem faced by a firm when workers’ skills are distributed along several dimensions and jobs require different skills to varying extent. I derive optimal assignment rules with and without slot constraints, and show that under certain circumstances workers may get promoted although in their new job they are expected to be less productive than in their old job. This can be interpreted as a version of the Peter Principle which states that workers get promoted up to their level of incompetence.
    Keywords: job assignment, worker selection, internal hiring, Peter Principle, slot constraints, multi-dimensional skills
    JEL: M12 J0 J62 M51
    Date: 2010–05
  17. By: John Buchanan; Linda Scott; Serena Yu; Hanna Schutz; Michelle Jakubauskas
    Abstract: In recent times the ambit of skills policy has broadened. The recent preoccupation with supply side issues (e.g. increasing the number of citizens with higher level qualifications), in particular, is being questioned. Demand side matters (e.g. how employers develop and use skills) are now increasingly recognised as being of equal significance. This paper addresses two questions: 1) How can skills demand and skills utilisation be best measured at the local level? 2) What efforts to improve skills utilisation at the local and regional level have been undertaken in OECD countries in recent times?
    Date: 2010–05

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.
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