nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2011‒04‒09
eight papers chosen by
Tommaso Reggiani
Universita' di Bologna

  1. Measuring Human Capital in Japan By MIYAZAWA Kensuke
  2. Real Business Cycles with a Human Capital Investment Sector and Endogenous Growth: Persistence, Volatility and Labor Puzzles By Dang, Jing; Gillman, Max; Kejak, Michal
  3. Education : past, present and future global challenges By Patrinos, Harry Anthony; Psacharopoulos, George
  4. Career and Wage Dynamics: Evidence from Linked Employer-Employee Data By Antti Kauhanen; Sami Napari
  5. The Spatial Distribution of Human Capital: Can It Really Be Explained by Regional Differences in Market Access? By Xavier Enrique López-Bazo; Burhan Can Karahasan
  6. Firm's demand for work hours: Evidence from multi-country and matched firm-worker data By KURODA Sachiko; YAMAMOTO Isamu
  7. Organizational Differences between U.S. Major Leagues and European Leagues: Implications for Salary Caps By Helmut Dietl; Egon Franck; Markus Lang; Alexander Rathke
  8. Compensation Structure and the Creation of Exploratory Knowledge in Technology Firms By Cui, Victor; Ding, Waverly W.; Yanadori, Yoshio

  1. By: MIYAZAWA Kensuke
    Abstract: This paper measures human capital development in the Japanese workforce after WWII. An increase in workers' years of schooling is believed to have aided Japan's economic growth after WWII. The development of human capital has acquired increasing importance for Japan's future economic growth given its aging population. To quantify these historical and forward-looking contributions of human capital, we construct a dataset that incorporates the distribution of workers' years of schooling by employing data covering workers and students. We transform years of schooling into a measure of human capital by using a nonlinear Mincer-type wage function. We find that workers' average years of schooling increased dramatically during the 1950s and 1960s. While this increase in human capital could explain much of Japan's economic growth during these decades, education policies have limited prospects for contributing to Japan's future economic growth.
    Date: 2011–03
  2. By: Dang, Jing; Gillman, Max (Cardiff Business School); Kejak, Michal
    Abstract: A positive joint two-sector productivity shock causes Rybczynski (1955) and Stolper and Samuelson (1941) effects that release leisure time and initially raises the relative price of human capital investment so as to favor it over goods production. This enables a basic RBC model, modified by having the household sector produce human capital investment sector, to succeed along related major dimensions of output, consumption, investment and labor, similar to the international approach of Maodifying the dynamics relative to the important work of Jones et al. (2005), two key US facts stressed by Cogley and Nason (1995) are captured: persistent movements in the growth rates of output and hump-shaped impulse responses of output. Further, physical capital investment has data consistent persistence within a hump-shaped impulse response. And Gali's (1999) challenging empirical finding that labour supply decreases upon impact of a positive productivity shock is reproduced, while volatility in working hours is also data-consistent because of the substitution between market and nonmarket sectors.
    Keywords: Real business cycle; human capital; persistence; volatility; labor
    JEL: E24 E32 O41
    Date: 2011–03
  3. By: Patrinos, Harry Anthony; Psacharopoulos, George
    Abstract: Progress in educational development in the world since 1900 has been slow and uneven between countries. Providing basic education for all children in developing countries has been and remains an unmet challenge of governments and international organizations alike. This is in sharp contrast to recent findings in the economics literature on the catalytic role of human capital for economic growth and social development in general. Using a newly constructed matched data set on education and national accounts in the 1950 to 2010 period, this paper estimates the loss of income and equity associated with not having a faster rate of human capital accumulation, using alternative methodologies and specific country examples. Such loss is projected backward (1900-1950) and forward (2010-2050) using plausible assumptions regarding what countries could have done in the past or may do in the future to accelerate human capital formation. The findings suggest that the welfare loss in terms of per capita income conservatively ranges from about 7 to 10 percent. Improved educational attainment is also shown to have an effect in reducing income inequality.
    Keywords: Education For All,Economic Theory&Research,Primary Education,Access&Equity in Basic Education,Achieving Shared Growth
    Date: 2011–03–01
  4. By: Antti Kauhanen; Sami Napari
    Abstract: We study career and wage dynamics within and between firms using a large linked employer-employee panel dataset spanning 26 years. We construct six-level hierarchies for more than 5,000 firms. We replicate most of the analyses from Baker, Gibbs and Holmström (Quarterly Journal of Economics, 1994) and make some extensions. Many of our results corroborate their findings. Careers within firms are important, but the strong version of the theory of internal labor markets does not fit the data. Recent theories of career and wage dynamics explain our findings well.
    Keywords: internal labor markets, employer changes, promotions, wage growth, human capital
    JEL: M51 M12 J62 L22
    Date: 2011–03–28
  5. By: Xavier Enrique López-Bazo (Faculty of Economics, University of Barcelona); Burhan Can Karahasan (Istanbul Bilgi University,)
    Abstract: This paper tests the robustness of estimates of market access impact on regional variability in human capital, as previously derived in the NEG literature. Our hypothesis is that these estimates of the coefficient of market access, in fact, capture the effects of regional differences in the industrial mix and the spatial dependence in the distribution of human capital. Results for the Spanish provinces indicate that the estimated impact of market access vanishes and becomes non-significant once these two elements are included in the empirical analysis.
    Keywords: human capital, geography, market access, spatial dependence. JEL classification:C21, I21, R12,
    Date: 2011–02
  6. By: KURODA Sachiko; YAMAMOTO Isamu
    Abstract: Using information on Japanese, UK, and German workers' work hour and matched firms' characteristics, this paper investigates whether the number of hours worked is determined by demand-side factors, and tries to introduce one possibility to explain why Japanese tend to work longer hours than workers in other countries. Based on an empirical framework that each firm sets a minimum boundary of work hours, and workers hired by the firm are not able to work less than the minimum requirement, we found that the minimum requirement depends on the fixed costs of labor that the firm bears. Specifically, firms that tend to conduct labor hoarding during recessions, presumably because of higher fixed costs, require incumbent workers to work longer hours. We also found that the greater the workers' firm-specific skills, the more firms placed demands on these workers to work longer hours, given other things are equal. Since Japanese firms have long been considered to bear large fixed costs to train workers, we interpret the long work hour requirement as a rational strategy for Japanese firms to protect those workers that have accumulated high skills from dismissal. In other words, the long work hours of Japanese workers reflect the practice of long-term employment, a typical feature of the Japanese labor market.
    Date: 2011–03
  7. By: Helmut Dietl (Institute for Strategy and Business Economics, University of Zurich); Egon Franck (Institute for Strategy and Business Economics, University of Zurich); Markus Lang (Institute for Strategy and Business Economics, University of Zurich); Alexander Rathke (Institute for Empirical Research in Economics, University of Zurich)
    Abstract: This paper outlines and compares the organizational structure of major sports leagues, explores the reasoning behind their formation, and derives implications for salary caps in European football. To understand why sports leagues have developed a specific organizational structure, one must take the economic peculiarities of team sports leagues into consideration. For this purpose, we analyze the production process and illuminate its major peculiarities. For example, we present the difference between economic competition and competition on the pitch and discuss the consequences of this distinction for an attractive final product. Furthermore, we show that a hold-up problem exists between the two stages of the production process and demonstrate how these problems are overcome by the organizational structure chosen by sports leagues. We also outline the differences between the U.S. major leagues and European leagues and document recent developments in that context. Finally, based on this comparative institutional analysis, we derive implications for the introduction of salary caps into European football.
    Keywords: Sports leagues, organization, salary cap, hold-up problem
    JEL: L83
    Date: 2011–03
  8. By: Cui, Victor; Ding, Waverly W.; Yanadori, Yoshio
    Abstract: Given the importance of exploration in a firm’s overall innovation program, scholars have sought to understand organizational factors that give rise to exploration-oriented innovations. We propose theory and empirical evidence that relates firms’ use of financial incentives to their exploratory innovation performance. We expect that a larger proportion of long-term incentives in R&D employee compensation should be positively associated with the creation of exploratory innovation in a firm. In addition, we propose that a higher level of horizontal pay dispersion is negatively associated with the creation of exploratory innovation. We examine innovations reflected in the patents of a unique six-year, unbalanced panel dataset of 94 high-technology firms in the U.S. Empirical results confirm that firms with high level of horizontal pay dispersion have less exploratory patent innovations. However, surprisingly, firms that pay their R&D employees a higher proportion of long-term financial incentives in total compensation have lower level of exploratory innovation. This implies the possibility that popular longterm incentive plans in high-technology sectors (e.g., stock option plans) have failed to achieve their intended goals in practice. We discuss factors that might moderate the negative impact of long-term incentives on exploratory innovation.
    Keywords: Organizational Behavior and Theory
    Date: 2011–03–30

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