nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2011‒05‒24
thirteen papers chosen by
Tommaso Reggiani
Universita' di Bologna

  1. Retaining through Training: Even for OlderWorkers By Matteo PICCHIO; Jan C. van OURS
  2. Human capital and its effect on the farm business life cycle By Hadrich, Joleen C.
  3. The Employment Advantages of Skilled Urban Areas By Ana Maria DIAZ ESCOBAR
  4. The Value of Human Capital Wealth By Julian di Giovanni; Akito Matsumoto
  5. The determinants of Italy’s regional imbalances over the long run: exploring the contributions of human and social capital By Emanuele Felice
  6. Ethnic School Segregation and Second-generation Immigrants' Human Capital By Nordin, Martin
  7. The Impacts of Change in Local Industrial Composition on Off-Farm Labor Supply By Brown, Jason P.
  8. The prospect of migration, sticky wages, and 'educated unemployment' By Fan, C. Simon; Stark, Oded
  9. Cognitive Skills, Non-Cognitive Skills, and the Employment and Wages of Young Adults in Rural China By Glewwe, Paul; Huang, Qiuqiong; Park, Albert
  10. Bounds on Quantile Treatment Effects of Job Corps on Participants' Wages By Blanco, German; Flores, Carlos A.; Flores-Lagunes, Alfonso
  11. Higher Education and agricultural careers: the relative importance of and returns to an agricultural major By Artz, Georgeanne M.; Kimle, Kevin L.; Orazem, Peter F.
  12. Who Benefits from KIPP? By Angrist, Joshua; Dynarski, Susan; Kane, Thomas J.; Pathak, Parag A.; Walters, Christopher R.
  13. Team Incentives and Reference-Dependent Preferences By Kohei Daido; Takeshi Murooka

  1. By: Matteo PICCHIO (Tilburg University, CentER, ReflecT, The Netherlands and IZA, Germany); Jan C. van OURS (Tilburg University, CentER, ReflecT, The Netherlands, University of Melbourne, Australia, CESifo, Germany, CEPR, United Kingdom and IZA, Germany)
    Abstract: This paper investigates whether on-the-job training has an effect on the employability of workers. Using data from the Netherlands we disentangle the true effect of training incidence from the spurious one determined by unobserved individual heterogeneity. We also take into account that there might be feedback from shocks in the employment status to future propensity of receiving firm-provided training. We find that firm-provided training significantly increases future employment prospects. This finding is robust to a number of robustness checks. It also holds for older workers, suggesting that firm-provided training may be an important instrument to retain older workers at work.
    Keywords: training, employment, human capital, older workers
    JEL: C33 C35 J21 J24 M53
    Date: 2011–04–29
  2. By: Hadrich, Joleen C.
    Abstract: Human capital has been identified as significant determinant of farm size growth. However, there are numerous measures for human capital. Traditional measures include age, experience, and education of the principal operator and a management measure. This study identifies three types of management capabilities: production, financial, and human resource, as human capital measures. Farm size growth is estimated over a 15 year time period, 1994-2009. Results indicate that age of principal operator, financial management, and human resource management are significant determinants of farm size growth.
    Keywords: human capital, farm life cycle, farm growth, Agricultural Finance, Farm Management, Labor and Human Capital,
    Date: 2011
  3. By: Ana Maria DIAZ ESCOBAR (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: This paper explores whether the agglomeration of human capital leads to social employment advantages in urban labor markets of a developing country: Colombia. I estimate the social effects of human capital agglomeration by comparing employment opportunities of individuals located in urban areas in which the level of education differs. Results show that employment opportunities are higher on average in skilled urban areas. Three explanations have been offered: human capital externalities, production complementarities, and consumption spillovers. To distinguish between them, I analyze the effect of an increase on the college share on the employment rate for different education groups. Spatial employment differences in Colombia are mostly explained by human capital externalities and production complementarities.
    Keywords: local labor markets, employment, human capital externalities, production complementarities, consumer demand spillovers, signaling, congestion
    JEL: R23 J21 J24
    Date: 2011–04–26
  4. By: Julian di Giovanni; Akito Matsumoto
    Abstract: The value of human capital wealth and its return process are important to quantify in order to study consumption behavior and portfolio allocation. This paper introduces a new approach to measure the value of an economy's total human capital wealth. By assuming that the consumption to wealth ratio is constant, we exploit aggregate consumption data to recover total wealth, and then use household non-human capital wealth data to recover the value of human capital wealth as a residual. Using U.S. data over the period 1952-2007, we find that human capital is approximately three-quarters of total wealth in the aggregate economy, and that this ratio is remarkably stable over time. Applying our methodology to a group of OECD countries yields similar results. We estimate the cointegrating relationship between our estimated measure of human wealth and labor compensation (income) to show that our consumption-based approach estimate of human capital is linked to one based on a labor-income approach. We next calculate the returns to human capital and find them to be as high as equity returns on average but much less volatile; positively correlated with returns on real estate and consumption growth, but negatively correlated to equity returns. Finally, we show that both human capital and equity returns are predictable by human capital's dividend to price ratio.
    Keywords: Household Wealth, Human Capital, Wealth Effect
    JEL: E21 E24 G10
    Date: 2011–03
  5. By: Emanuele Felice (Autonomous University of Barcelona and University of Siena)
    Abstract: The article aims to present and discuss estimates of levels of human and social capital in Italy’s regions over the long term, i.e. roughly from the second half of the nineteenth century up to the present day. The results are linked to newly available evidence for regional value added in order to begin to form an explanatory hypothesis of long-term regional inequality in Italy. More particularly, convergence in value added per capita across Italy’s regions is tested (through both cross-section and dynamic panel regressions) in light of the neoclassical exogenous growth approach, which incorporates human capital and social capital as conditioning variables into a long-term production function. On the whole, the results confirm the importance of conditioning variables, i.e. of regional differences in human capital and social capital, but also suggest that their impact significantly changed over the twentieth century, thus supporting the view that, in different periods, conditioning variables are determined by technological regimes.
    Keywords: regional history, human capital, social capital, convergence
    JEL: E13 E24 N93 N94 R11
    Date: 2011–03–28
  6. By: Nordin, Martin (Department of Economics, Lund University)
    Abstract: Recent research has shown that there is a substantial skill difference in Sweden between natives and second-generation immigrants. The objective of this study is to find out whether there exists a relationship between ethnic school segregation and the individual’s human capital. The variation in ethnic concentration rate between cohorts within a school generally does not affect the individual’s human capital outcome. However when estimating specific peer influences between different ethnic groups (first-generation immigrants, second generation immigrants with two foreign-born parent and second generation immigrants with one foreign-born parent) the study shows three major findings. First, for men (both natives and second-generation immigrants) there is a general negative effect of having a large share of first-generation immigrant schoolmates. Second, for both men and women a large share of schoolmates with a completely foreign background (non-native parents) has a negative influence on the Swedish grades of second-generation immigrants with two foreign-born parents. Third, for men there seem to exist specific and positive peer influences within the groups of second-generation immigrants with either one or two foreign-born parents.
    Keywords: Ethnic Segregation; second-generation immigrants; human capital test score gap
    JEL: I21 J24
    Date: 2011–04–28
  7. By: Brown, Jason P.
    Abstract: Most U.S. farm households have either the operator or spouse working off-farm for wages and salaries or proprietorships. Additionally, off-farm income continues to grow as a share of total household income. Little is known about how changes in local industrial composition impact off-farm labor decisions. Using a household utility maximization framework, this analysis employs a two-stage process to 1) predict joint off-farm labor participation of operators and spouses, and 2) measure the impact of farm and household characteristics, and changes in county-level industry on levels of off-farm labor supply. Results show that labor participation decisions are jointly determined. Human capital is among the most significant individual characteristics impacting labor supply. The most important factors are the industrial sector of the off-farm job, and whether that sector is growing or in decline. Growth in retail trade and service employment is associated with increases in labor supply for the operator and spouse.
    Keywords: farm household, labor supply, bivariate logit, Community/Rural/Urban Development, Labor and Human Capital, Q12, J22, R23,
    Date: 2011
  8. By: Fan, C. Simon; Stark, Oded
    Abstract: An increase in the probability of work abroad, where the returns to schooling are higher than at home, induces more individuals in a developing country to acquire education, which leads to an increase in the supply of educated workers in the domestic labor market. Where there is a sticky wage-rate, the demand for labor at home will be constant. With a rising supply and constant demand, the rate of unemployment of educated workers in the domestic labor market will increase. Thus, the prospect of employment abroad causes involuntary 'educated unemployment' at home. A government that is concerned about 'educated unemployment' and might therefore be expected to encourage unemployed educated people to migrate will nevertheless, under certain conditions, elect to restrict the extent of the migration of educated individuals. --
    Keywords: The prospect of migration,Sticky wages,'Educated unemployment',Government intervention
    JEL: E24 F22 J24 O15
    Date: 2011
  9. By: Glewwe, Paul; Huang, Qiuqiong; Park, Albert
    Abstract: The objective of this paper is to examine whether noncognitive skills explain differences in employment status and hourly wages even after controlling for age, experience, schooling and cognitive skills. Of particular interest is to examine the relative magnitudes of the impacts of the cognitive and noncognitive skills on these labor market outcomes. Data used in this paper come from the Gansu Survey of Children and Families (GSCF), which followed a random sample of 2,000 children in rural areas of Gansu Province who were 9-12 years old in the year 2000. Three waves of surveys were completed in 2000, 2004, and 2007-2009. The GSCF is the first large-scale data collection on child and adolescent cognitive and noncognitive skills in rural China.
    Keywords: cognitive skills, noncognitive skills, years of schooling, wage, Gansu, China, International Development, Labor and Human Capital,
    Date: 2011
  10. By: Blanco, German; Flores, Carlos A.; Flores-Lagunes, Alfonso
    Abstract: This paper assesses the effect of the U.S. Job Corps (JC), the nation's largest and most comprehensive job training program targeting disadvantaged youths, on wages. We employ partial identification techniques and construct informative nonparametric bounds for the causal effect of interest under weaker assumptions than those conventionally used for point identification of treatment effects in the presence of sample selection. In addition, we propose and estimate bounds on quantile treatment effects of the program on participants' wages. In general, we find convincing evidence of positive impacts of JC on participants' wages. Importantly, we find that estimated impacts on lower quantiles of the distribution are higher, with the highest impact being in the 5th percentile where a positive effect on wages is bounded between 8.4 and 16.1 percent. These bounds suggest that JC results in wage compression within eligible participants.
    Keywords: Job Corps, Nonparametric Bounds, Principal Stratification, Active Labor Market Programs., Labor and Human Capital, Public Economics, Research Methods/ Statistical Methods, J24, J68, C14, C21,
    Date: 2011
  11. By: Artz, Georgeanne M.; Kimle, Kevin L.; Orazem, Peter F.
    Abstract: Agribusiness firms are increasingly hiring non-agriculture college graduates. Unclear is whether the demand for non-agriculture graduates is predicated on an undersupply of agriculture graduates or if non-agriculture graduates have skills that are not being developed in traditional agriculture programs. This study uses a large random sample of graduates of a Midwestern Land-Grant University to explore the returns by major in the agricultural and non-agricultural sectors. The strength of the study is its ability to identify the value of agricultural sector-specific skills versus general skills developed by major. The results suggest that there are substantial returns to agriculture majors working in agriculture, but only when the firms are located in urban areas. In addition, the pay gap between working in agriculture and outside of agriculture varies by majors within the College of Agriculture and Life Sciences. This suggests that some majors develop substantial sector-specific skills, while others, notably Agricultural Business/Agricultural Economics develop more generally valued skills.
    Keywords: salary models, agricultural economics, college of agriculture graduages, industry specific skills, Agribusiness, Labor and Human Capital,
    Date: 2011
  12. By: Angrist, Joshua (MIT); Dynarski, Susan (University of Michigan); Kane, Thomas J. (Harvard University); Pathak, Parag A. (MIT); Walters, Christopher R. (MIT)
    Abstract: The nation's largest charter management organization is the Knowledge is Power Program (KIPP). KIPP schools are emblematic of the No Excuses approach to public education, a highly standardized and widely replicated charter model that features a long school day, an extended school year, selective teacher hiring, strict behavior norms, and a focus on traditional reading and math skills. No Excuses charter schools are sometimes said to focus on relatively motivated high achievers at the expense of students who are most diffiult to teach, including limited English proficiency (LEP) and special education (SPED) students, as well as students with low baseline achievement levels. We use applicant lotteries to evaluate the impact of KIPP Academy Lynn, a KIPP school in Lynn, Massachusetts that typifies the KIPP approach. Our analysis focuses on special needs students that may be underserved. The results show average achievement gains of 0.36 standard deviations in math and 0.12 standard deviations in reading for each year spent at KIPP Lynn, with the largest gains coming from the LEP, SPED, and low-achievement groups. The average reading gains are driven almost completely by SPED and LEP students, whose reading scores rise by roughly 0.35 standard deviations for each year spent at KIPP Lynn.
    Keywords: human capital, charter schools, achievement
    JEL: I21 I28
    Date: 2011–05
  13. By: Kohei Daido (School of Economics, Kwansei Gakuin University); Takeshi Murooka (Department of Economics, University of California, Berkeley)
    Abstract: This paper examines a multi-agent moral hazard model in which agents have expectation-based reference-dependent preferences `a la K˝oszegi and Rabin (2006, 2007). The agents’ utilities depend not only on their realized outcomes but also on the comparisons of their realized outcomes with their reference outcomes. Due to loss aversion, the agents have a first-order aversion to wage uncertainty. Thus, reducing their expected losses by partially compensating for their failure may be beneficial for the principal. When the agent is loss averse and the project is hard to achieve, the optimal contract is based on team incentives which exhibit either joint performance evaluation or relative performance evaluation. Our results provide a new insight: team incentives serve as a loss-sharing device among agents. This model can explain the empirical puzzle of why firms often pay a bonus to low-performance employees as well as high-performance employees.
    Keywords: Moral Hazard, Team Incentives, Reference-Dependent Preferences, Loss Aversion, Joint Performance, Evaluation, Relative Performance Evaluation
    JEL: D86 M12 M52
    Date: 2011–05

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