nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2010‒09‒25
thirteen papers chosen by
Fabio Sabatini

  1. Taxing Human Capital: A Good Idea By Christoph Braun
  2. Human Capital Investment and the Gender Division of Labor By Mark M. Pitt; Mark Rosenzweig; Nazmul Hassan
  3. The importance of human capital on economic growth models By Koumparoulis, Dimitrios
  4. Productivity growth, human capital and distance to frontier in Sub-Saharan Africa By Danquah, Michael; Ouattara, Osman; Speight, Alan
  5. Emigration Prospects and Human Capital in the Developing Countries: The Possibility of the Qualitative Brain Gain By Kouni, Mohamed
  6. External Eff ects of Education: Human Capital Spillovers in Regions and Firms By Thomas K. Bauer; Matthias Vorell
  7. Orphanhood and Critical Periods in Children's Human Capital Formation: Long-Run Evidence from North-Western Tanzania By Hagen, Jens; Omar Mahmoud, Toman; Trofimenko, Natalia
  8. Education and Long-Term Unemployment By Garrouste, Christelle; Kozovska, Kornelia; Arjona Perez, Elena
  9. The Demographic Transition: Causes and Consequences By Oded Galor
  10. Continuous Training and Wages – An Empirical Analysis Using a Comparison-group Approach By Katja Görlitz
  11. Higher Education in India: Seizing the Opportunity By Sanat Kaul
  12. A household-based Human Development Index By Harttgen, Kenneth; Klasen, Stephan
  13. Quality of Education and Equality of Opportunity in Spain: Lesson from Pisa By Calo-Blanco Aitor; Villar Notario Antonio

  1. By: Christoph Braun
    Abstract: This paper studies a Ramsey optimal taxation model with human capital in an infi nite-horizon setting. Contrary to Jones, Manuelli, and Rossi (1997), the human capital production function does not include the current stock of human capital as a production factor. As a result, the return to human capital, namely labor income, does not vanish in equilibrium. In a stationary state, the household underinvests in human capital relative to the fi rst best, i.e., education is distorted. Human capital is eff ectively taxed. The optimal tax scheme prescribes making the cost of education not fully tax-deductible.
    Keywords: Optimal taxation; human capital; Ramsey approach
    JEL: H21 I28 J24
    Date: 2010–09
  2. By: Mark M. Pitt (Brown University); Mark Rosenzweig (Department of Economics, Yale University); Nazmul Hassan (Dhaka University)
    Abstract: We use a model of human capital investment and activity choice to explain facts describing gender differentials in the levels and returns to human capital investments. These include the higher return to and level of schooling, the small effect of healthiness on wages, and the large effect of healthiness on schooling for females relative to males. The model incorporates gender differences in the level and responsiveness of brawn to nutrition in a Roy-economy setting in which activities reward skill and brawn differentially. Empirical evidence from rural Bangladesh provides support for the model and the importance of the distribution of brawn.
    Keywords: brawn, health, schooling, gender
    JEL: O1 J1 J2
    Date: 2010–09
  3. By: Koumparoulis, Dimitrios
    Abstract: The aim of this paper is to emphasize on the importance of human capital as variable for a better understandinh of economic growth models
    Keywords: economic growth models; human capital
    JEL: O40
    Date: 2010
  4. By: Danquah, Michael; Ouattara, Osman; Speight, Alan
    Abstract: Using the Malmquist productivity index and panel data methods, we study the role of total human capital and its composition in the technological "catch-up" process and productivity growth via the channels of innovation and adoption of technology in a panel of 19 sub -Saharan African countries between 1960 and 2003. Our findings indicate different roles played by the composition of human capital and a follow-on consistent and significant contribution of total human capital to productivity growth. Primary and secondary school attainment (unskilled labour) contribute significantly to the adoption of technology(the main source of productivity growth in sub-Saharan Africa) whilst tertiary school attainment (skilled labour) plays a significant role in local innovation. Total human capital on the other hand, contribute more significantly to the adoption of technology and innovation. Technological "catch-up" remains a significant element in productivity growth in sub-Saharan Africa and economies with higher tertiary school attainment(skilled labour) and higher total human capital tend to contribute significantly to productivity growth through the channel of technological "catch-up". Our results rather point towards a circuitous depiction of the symbiotic characteristics of the composition of human capital in enhancing productivity growth in sub-Saharan Africa and hence efforts in scaling- up investments in human capital by governments, development partners etc should not be too concentrated on one composition of human capital. --
    Keywords: Productivity growth,Human capital,Sub-Saharan Africa
    JEL: D24 O47 O55
    Date: 2010
  5. By: Kouni, Mohamed
    Abstract: In this paper we study the net effect of high-skilled emigration. Hence, we elaborate a simple theoretical model that studies the net effect of high-skilled emigration. The result showed that the emigration in the case where the fraction of human capital that emigrates is inferior to the critical level (equal to the difference between one and the elasticity of brain gain with respect to emigration), as well as in the case of the strong selectivity adopted, the emigration has the possibility to create a quantitative and qualitative brain gain. Indeed, to determine the net effect of brain drain we propose a new method that decomposes the gross investment of human capital into two components: the net domestic incentive effect and the net quantitative brain drain effect. Through This decomposition we can determine the net quantitative effect that arrives from the interior situation and the one arriving from the prospects effect. Finally, we tempt to define the indicator of the qualitative effect of this phenomenon. The empirical results showed that the emigration has an important effect on the human capital investment. Thus, the majority of countries have the possibility to register a net quantitative gain. Nevertheless, little of countries only have the possibility to record a qualitative brain gain.
    Keywords: Brain drain; human capital; development
    JEL: O15
    Date: 2010–09–17
  6. By: Thomas K. Bauer; Matthias Vorell
    Abstract: Using a matched employer-employee panel dataset for Germany, we analyze the external eff ects of education on individual wages. Following the basic framework of Moretti (2004), we allow spillover eff ects to occur both within a specifi c fi rm and a specifi c region rather than analyzing spillover eff ects only on a regional level. Controlling for individual- and fi rm-specifi c fi xed eff ects and using an instrumental variable strategy, our results confi rm the existence of positive but small external eff ects of human capital. Positive spillover eff ects within fi rms occur only for the group of high-skilled workers.
    Keywords: External eff ects; human capital; employer-employee matched data
    JEL: C23 D62 J31
    Date: 2010–07
  7. By: Hagen, Jens; Omar Mahmoud, Toman; Trofimenko, Natalia
    Abstract: Losing a parent is a trauma that has consequences for human capital formation. Does it matter at what age this trauma occurs? Using longitudinal data from the Kagera region in Tanzania that span thirteen years from 1991-2004, we find considerable impact heterogeneity across age at bereavement, but less so for the death of opposite-sex parents. In terms of long-term health status as measured by body height, children who lose their same-sex parent before teenage years are hit hardest. Regarding years of formal education attained in young adulthood, boys whose fathers die before adolescence suffer the most. Maternal bereavement does not fit into this pattern as it affects educational attainment of boys and girls in a similar way. The generally strong interaction between age at parental death and sex of the late parent suggests that the preferences of the surviving parent partly protect same-sex children from orphanhoods detrimental effects on human capital accumulation. --
    Keywords: orphans,health,education,timing of parental death,child development,HIV/AIDS
    JEL: I31 J19 C14 C23
    Date: 2010
  8. By: Garrouste, Christelle; Kozovska, Kornelia; Arjona Perez, Elena
    Abstract: This paper investigates the relationship between education and long-term unemployment when considering regional economic differences and other relevant variables at the individual and at the local level, using data from the 2004-2006 EU-SILC (11 countries). The analysis has been run using both a binary logit model and a binary scobit model. Our results suggest that the probability of an individual to be in long-term unemployment decreases with her educational level. There is a decrease in returns to education after the age of 40, which confirms the assumption of an obsolescence of skills defended in the human capital literature. With regard to the regional settings, younger workers (20-30) and older workers (50-65) tend to benefit more from the dynamics offered by highly competitive regions.
    Keywords: unemployment differentials; education and long-term unemployment; regional competitiveness
    JEL: J01 J64 J24
    Date: 2010
  9. By: Oded Galor
    Abstract: This paper develops the theoretical foundations and the testable implications of the various mechanisms that have been proposed as possible triggers for the demographic transition. Moreover, it examines the empirical validity of each of the theories and their significance for the understanding of the transition from stagnation to growth. The analysis suggests that the rise in the demand for human capital in the process of development was the main trigger for the decline in fertility and the transition to modern growth
    Keywords: Demographic trnasition; Gender Gap; Human capital; Fertility; Mortality; Unified Growth Theory
    Date: 2010
  10. By: Katja Görlitz
    Abstract: Using German linked employer-employee data, this paper investigates the impact of on-the-job training on wages. The applied estimation technique was fi rst introduced by Leuven and Oosterbeek (2008). The idea is to compare wages of employees who intended to participate in training but did not do so because of a random event with wages of training participants. The estimated wage returns are statistically insignifi - cant. Furthermore, the decision to participate in training is associated with sizeable selection eff ects. On average, participants have a wage advantage of more than 4% compared to non-participants.
    Keywords: Continuous training; wage returns; selection effect
    JEL: J24 J31
    Date: 2010–07
  11. By: Sanat Kaul
    Abstract: This paper reviews the prevailing policy environment to evaluate its efficacy in ensuring that India is successfully able to address these challenges in the education sector. Given the well established constraints on public funding of education, the role of the private sector specially in the provision of higher education and technical training has been highlighted. The paper suggests that India needs to have a proactive demand based policy towards private higher education including foreign institutions/universities desirous of setting up campus in India or entering into joint-ventures. This has to be combined with the establishment of a regulatory mechanism that ensures that students’ welfare is not compromised and quality standards are maintained. [ICRIER Working Paper 179]
    Keywords: policy, environment, education, technical training, foreign institutions, welfare
    Date: 2010
  12. By: Harttgen, Kenneth; Klasen, Stephan
    Abstract: One of the most serious weaknesses of the human development index (HDI) is that it considers only average achievements and does not take into account the distribution of human development within a country or by population subgroups. All previous attempts to capture inequality in the HDI have also used aggregate information and there exists no HDI at the household level. This paper provides a method and illustration for calculating the HDI at the household level. This immediately allows the analysis of the HDI by any kind of population subgroups and by household socioeconomic characteristics. Furthermore, it allows to apply any kind of inequality measure to the HDI across population subgroups and over time. We illustrate our approach for 15 developing countries. Inequality in the HDI is largest in poorer countries, particularly in Sub-Saharan Africa. We also find large inequalities within countries between population subgroups, particularly by income, location, and education of the household head. We also find considerable inequality when looking at inequality measures like the Theil or the Gini coefficient; within-group inequality is, however, invariably larger than between-group inequality and inequality in the HDI within countries is of similar order of magnitude of inequality in the HDI between countries. --
    Keywords: Human Development Index,Income Inequality,Differential Mortality,Inequality in Education
    JEL: I10 I20 I32 O10 O50
    Date: 2010
  13. By: Calo-Blanco Aitor (Pablo de Olavide University; Ivie); Villar Notario Antonio (Pablo de Olavide University; Ivie)
    Abstract: This working paper analyzes the performance of the Spanish educational system according to the 2006 PISA report, focussing on the equality of opportunity. The basic idea is that a good educational system should produce outcomes that depend basically on the students effort and not on the students external circumstances (parental background here). We present a simple formula to estimate the inequality of opportunity and analyze empirically the behaviour of Spain and its constituent regions, both with respect to quality (mean scores) and with respect to the inequality of opportunity. We find that Spain performs better than the European average in terms of equality of opportunity and worse in terms of quality. We also find large and systematic differences between the Spanish regions
    Keywords: Quality of education, equality of opportunity, PISA report, regional disparities
    Date: 2010–07–01

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