nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2010‒11‒20
six papers chosen by
Fabio Sabatini

  1. The impact of creativity on growth in German regions By Wedemeier, Jan
  2. The Protestant Ethic and Work: Micro Evidence from Contemporary Germany By Jörg L. Spenkuch
  3. Local Human Capital and Its Impact on Local Employment Chances in Britain By Ioannis Kaplanis
  4. Are Education and Entrepreneurial Income Endogenous and Do Family Background Variables Make Sense as Instruments?: A Bayesian Analysis By Jörn H. Block; Lennart F. Hoogerheide; A. Roy Thurik
  5. The Metrics of Human Rights: Complementarities of the Human Development and Capabilities Approach By Sakiko Fukuda-Parr
  6. Neighborhood effects and parental involvement in the intergenerational transmission of education By Eleonora Patacchini; Yves Zenou

  1. By: Wedemeier, Jan
    Abstract: The objective of this paper is to analyze the impact of the creative professions - technological employees and bohemians - on economic growth in Germany’s planning regions. It is concluded that technological employees and bohemians foster economic growth. We find that growth is particularly dynamic in agglomerated and urbanized regions. Among regional factors relevant to the location decisions of creative professionals, diversity is analyzed in particular, as it might stimulate growth because of its potential to increase the rate of interchange of different ideas and knowledge. Diversity is therefore a “knowledge production factor." The analysis of both - creative professions and diversity - is related to two current topics in regional economics, namely the knowledge based economy and its effects on city development, and the topic of creative cities.
    Keywords: Regional Economic Growth; Creativity; Diversity
    JEL: R1 O3 O4 R23
    Date: 2010
  2. By: Jörg L. Spenkuch
    Abstract: Few theories in the social sciences have gained more widespread acceptance than Max Weber’s The Protestant Ethic and the Spirit of Capitalism—despite a lack of conclusive empirical evidence. At the core of Weber’s theory lies a connection between Protestantism and attitudes toward work. Using micro-data from contemporary Germany, this paper investigates the impact of Protestantism on economic outcomes and whether any such connection still exists. To break the endogeneity in religious affiliation the paper exploits the fact that the geographic distribution of Catholics and Protestants is an artifact of a provision in the Peace of Augsburg in 1555. Reduced form and instrumental variable estimates indicate that, even today, Protestantism leads to higher earnings through increased hours of work, and substantially more self-employment. Institutional factors, or differences in human capital acquisition cannot account for this effect. Instead, the data point to an explanation based on individual values akin to a Protestant Ethic.
    Date: 2010
  3. By: Ioannis Kaplanis
    Abstract: This paper examines how high human capital in a locality is associated with the employmentoutcomes of individuals. A probit model is used to examine how the employment probabilityof otherwise similar working age males is associated with changes in the share of degreeholders in the local area. Different econometric specifications are employed in order to shedlight on the positive effect found and its possible causes. The paper discusses three mainaccounts, referring to the consumption demand, productivity spillovers and productioncomplementarities. For Britain, it is found that the share of high skill residents in a localityhas a strong positive impact on the local employment chances of men with no qualifications.The effect on the local employment chances of the other educational groups is eitherinsignificant or significant negative. These results are consistent with the consumer demandhypothesis that the presence of high educated, high income individuals in a locality boosts thedemand for local low skill services. On the other hand, when the share of skilled workers isused, the results hint on possible simultaneous effect of production complementarities andproductivity spillovers. However, the analysis points to the existing limitations ofsuccessfully isolating the consumption demand and the production function mechanisms andcalls for further research.
    Keywords: local labour markets, employment, consumer demand, human capital externalities
    JEL: J21 J24 R23
    Date: 2010–01
  4. By: Jörn H. Block; Lennart F. Hoogerheide; A. Roy Thurik
    Abstract: Education is a well-known driver of (entrepreneurial) income. The measurement of its influence, however, suffers from endogeneity suspicion. For instance, ability and occupational choice are mentioned as driving both the level of (entrepreneurial) income and of education. Using instrumental variables can provide a way out. However, three questions remain: whether endogeneity is really present, whether it matters and whether the selected instruments make sense. Using Bayesian methods, we find that the relationship between education and entrepreneurial income is indeed endogenous and that the impact of endogeneity on the estimated relationship between education and income is sizeable. We do so using family background variables and show that relaxing the strict validity assumption of these instruments does not lead to strongly different results. This is an important finding because family background variables are generally strongly correlated with education and are available in most datasets. Our approach is applicable beyond the field of returns to education for income. It applies wherever endogeneity suspicion arises and the three questions become relevant.
    Keywords: Education, income, entrepreneurship, self-employment, endogeneity, instrumental variables, Bayesian analysis, family background variables
    JEL: C11 L26 M13 J24
    Date: 2010
  5. By: Sakiko Fukuda-Parr (The New School)
    Abstract: Capabilities and human rights are closely related and share common commitments to freedom and justice as central political objectives. Much of the literature on this relationship has focused on defining the overlaps and differences between them as theoretical concepts. This paper explores a different aspect of the relationship, namely the overlaps and differences in their respective measurement approaches. The paper argues that human development indicators that are used to evaluate policies for capability expansion, or human development, cannot substitute for human rights indicators because of the differences in them as concepts as well as the way that these concepts are used and applied. Human rights indicators are used to assess the accountability of the state in complying with the obligations that are codified in international and domestic law. However, the literature of development economics and the methods of empirical analysis and aggregative summary measurements extensively used in the human development and capabilities (HD/C) approach can overcome some of the constraints of conventional methods used in human rights assessments. These possibilities are illustrated in the Economic and Social Rights Fulfillment Index, recently developed by Fukuda-Parr, Lawson-Remer and Randolph that conceptualizes an empirical model of ‘progressive realization’ and provides an empirical basis for setting benchmarks.
    Keywords: apability approach, human development, Sen, Nussbaum, human rights indicators, rights based approach to development, progressive realisation
    Date: 2010–11
  6. By: Eleonora Patacchini (Università di Roma "La Sapienza"); Yves Zenou (Stockholm University & Research Institute of Industrial Economics (IFN))
    Abstract: We analyze the intergenerational transmission of education focusing on the interplay between family and neighborhood effects. We develop a theoretical model suggesting that both neighborhood quality and parental effort are of importance for the education attained by children. This model proposes a mechanism explaining why and how they are of importance, distinguishing between high- and low-educated parents. We then bring this model to the data using a longitudinal data set in Britain. The available information on social housing in big cities allows us to identify the role of neighbourhood in educational outcomes. We find that the better is the quality of the neighborhood, the higher is the parents’ involvement in their children’s education. A novel finding with respect to previous US studies is that family is of importance for children with highly-educated parents while it is the community that is crucial for the educational achievement of children from low-educated families.
    Keywords: Education, cultural transmission, cultural substitution, peer effects, social tenants.
    JEL: I21 J13 J24
    Date: 2010

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