nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒06‒22
five papers chosen by
Tommaso Reggiani
University of Cologne

  1. Human Capital and Unemployment Dynamics: Why More Educated Workers Enjoy Greater Employment Stability By Cairo, Isabel; Cajner, Tomaz
  2. A Case against Taxes and Quotas on High-Skill Emigration - Working Paper 363 By Michael Clemens
  3. Human Capital and Industrialization: Evidence from the Age of Enlightenment By Mara P. Squicciarini; Nico Voigtländer
  4. Books do not die: the price of information, Human Capital and the Black Death in the long fourteenth century By Eltjo Buringh
  5. Why Do Earnings Fall with Job Displacement? By Carrington, William J.; Fallick, Bruce C.

  1. By: Cairo, Isabel (Universitat Pompeu Fabra); Cajner, Tomaz (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: Why do more educated workers experience lower unemployment rates and lower employment volatility? A closer look at the data reveals that these workers have similar job finding rates, but much lower and less volatile separation rates than their less educated peers. We argue that on-the-job training, being complementary to formal education, is the reason for this pattern. Using a search and matching model with endogenous separations, we show that investments in match-specific human capital reduce the outside option of workers, implying less incentives to separate. The model generates unemployment dynamics that are quantitatively consistent with the cross-sectional empirical patterns.
    Keywords: Unemployment; education; on-the-job training; specific human capital
    Date: 2013–11–01
  2. By: Michael Clemens
    Abstract: Skilled workers have a rising tendency to emigrate from developing countries, raising fears that their departure harms the poor. To mitigate such harm, researchers have proposed a variety of policies designed to tax or restrict high-skill migration. Those policies have been justified as Pigovian regulations to raise efficiency by internalizing externalities, and as non-Pigovian regulations grounded in equity or ethics. This paper challenges both sets of justifications, arguing that Pigovian regulations on skilled emigration are inefficient and non-Pigovian regulations are inequitable and unethical. It concludes by discussing a different class of policy intervention that, in contrast, has the potential to raise welfare.
    Keywords: brain drain, migration, immigration, emigration, mobility, labor, skill, education, human capital
    JEL: F22 J24 O15
    Date: 2014–05
  3. By: Mara P. Squicciarini; Nico Voigtländer
    Abstract: While human capital is a strong predictor of economic development today, its importance for the Industrial Revolution is typically assessed as minor. To resolve this puzzling contrast, we differentiate average human capital (worker skills) from upper tail knowledge both theoretically and empirically. We build a simple spatial model, where worker skills raise the local productivity in a given technology, while scientific knowledge enables local entrepreneurs to keep up with a rapidly advancing technological frontier. The model predicts that the local presence of knowledge elites is unimportant in the pre-industrial era, but drives growth thereafter; worker skills, in contrast, are not crucial for growth. To measure the historical presence of knowledge elites, we use city-level subscriptions to the famous Encyclopédie in mid-18th century France. We show that subscriber density is a strong predictor of city growth after 1750, but not before the onset of French industrialization. Alternative measures of development confirm this pattern: soldier height and industrial activity are strongly associated with subscriber density after, but not before, 1750. Literacy, on the other hand, does not predict growth. Finally, by joining data on British patents with a large French firm survey from 1837, we provide evidence for the mechanism: upper tail knowledge raised the productivity in innovative industrial technology.
    JEL: J24 N13 O14 O41
    Date: 2014–06
  4. By: Eltjo Buringh
    Abstract: The overall price trend of late-medieval hand-written books was downwards, despite rising demand by a more literate population, causing upward pressure on prices. Gradually, higher writing speeds reduced late-medieval book prices. A lower price of information facilitated schooling and an increase in human capital. The plague’s demographic shock (1348-1351) reduced used book prices to one half or two-thirds of their pre-plague levels, while production costs of new books then rose. Cheaper access to information (used books) in combination with other post-plague trend breaks gave human capital in the Latin West a boost, and laid a foundation for modern economic growth.
    Keywords: : hand-written books, human capital, economic growth, black death, books
    Date: 2014–06
  5. By: Carrington, William J. (Federal Reserve Bank of Cleveland); Fallick, Bruce C. (Federal Reserve Bank of Cleveland)
    Abstract: The earnings of workers are reduced for many years after being displaced from their jobs, and those workers and their families face increased risk of other problems as well. The ills suffered by displaced workers motivated several recent expansions of government programs, including the unemployment insurance system, and have spurred calls for wage insurance that would provide longerrun earnings replacement. However, while the magnitude of the losses is relatively clear, the theory of why displacement matters is scattered and somewhat undeveloped. Much of the policy discussion appears to interpret displacementinduced losses through the lens of specifi c human capital theory, and there is considerable empirical support for that model. But there are several other theories of why job displacement is costly. This paper reviews theories of costly job displacement and discusses their consistency with the available empirical evidence. We find that theories of human capital and matching are an important perspective on the losses of displaced workers, but we cannot rule out important roles for other theories, some of which suggest different policy responses.
    Keywords: Displaced workers; earnings loss; human capital; matching
    JEL: D13 D82 I20 J31 J63 J64
    Date: 2014–06–02

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