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on Labour Economics |
| By: | Pablo García; Paulina Granados |
| Abstract: | This paper analyses the relationship between an individual’s wage and unemployment in her region and industrial sector —the Wage Curve— in Chile from the 1990s onwards. It uses a host of national survey evidence, including the CASEN (Encuesta de Caracterización Socieconómica Nacional) and ESI (Encuesta Suplementaria de Ingreso) surveys. The evidence clearly points to the existence of a Wage Curve in Chile. The coefficient that relates individual wage with local unemployment rate is –0.04, and –0.13 in the case of the sectoral unemployment rate, both similar to those found in studies for other economies. Moreover, after 1999 the responsiveness of wages to local/sectoral unemployment rates seems to have increased. |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:320&r=lab |
| By: | Arantza Gorostiaga; Juan Francisco Rubio-Ramírez |
| Abstract: | This paper studies the use of a minimum wage law to implement the optimal redistribution policy when a distorting tax-transfer scheme is also available. The authors build a static general equilibrium model with a Ramsey planner making decisions on taxes, transfers, and minimum wage levels. Workers are assumed to differ only in their productivity. The authors find that optimal redistribution may imply the use of only taxes and transfers, only a minimum wage, or the proper combination of both policies. The key factor driving their results is the reaction of the demand for low-skilled labor to the minimum wage law. Hence, an optimal minimum wage appears to be most likely when low-skilled households are scarce, the complementarity between the two types of workers is large, or the difference in productivity is small. |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2004-30&r=lab |
| By: | Arantza Gorostiaga; Juan Francisco Rubio-Ramírez |
| Abstract: | In this paper, we derive conditions under which a minimum-wage law combined with anonymous taxes and transfers and an agent-specific tax-transfer scheme are equivalent policies. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2005-08&r=lab |
| By: | Igal Hendel; Joel Shapiro; Paul Willen |
| Abstract: | Affordable higher education is, and has been, a key element of social policy in the United States with broad bipartisan support. Financial aid has substantially increased the number of people who complete university—generally thought to be a good thing. We show, however, that making education more affordable can increase income inequality. The mechanism that drives our results is a combination of credit constraints and the ‘signaling’ role of education first explored by Spence (1973). When borrowing for education is difficult, lack of a college education could mean that one is either of low ability or of high ability but with low financial resources. When government programs make borrowing easier or tuition more affordable, high-ability persons become educated and leave the uneducated pool, driving down the wage for unskilled workers and raising the skill premium. |
| Keywords: | Education - Economic aspects ; Income distribution |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:04-5&r=lab |
| By: | David Neumark; Mark Schweitzer; William Wascher |
| Abstract: | The primary goal of a national minimum wage floor is to raise the incomes of poor families with members in the work force. We present evidence on the effects of minimum wages on family incomes from March CPS surveys. Using non-parametric estimates of the distributions of family income relative to needs in states and years with and without minimum wage increases, we examine the effects of minimum wages on this distribution, and on the distribution of the changes in income that families experience. Although minimum wages do increase the incomes of some poor families, the evidence indicates that their net effect is, if anything, to increase the proportions of families with incomes below or near the poverty line. Thus, it would appear that reductions in the proportions of families that are poor or near-poor should not be counted among the potential benefits of minimum wages. |
| Keywords: | Minimum wage ; Poverty |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0412&r=lab |
| By: | Anil Kumar |
| Abstract: | Econometric models with nonlinear budgets sets frequently arise in the study of impact of taxation on labor supply. Blomquist and Newey (2002) have suggested a nonparametric method to estimate the uncompensated wage and income effects when the budget set is nonlinear. This paper extends their nonparametric estimation method to censored dependent variables. The modified method is applied to estimate female wage and income elasticities using the 1987 PSID. I find evidence of bias if the nonlinearity in the budget set is ignored. The median compensated elasticity is estimated at 1.19 (with a standard error of 0.19). |
| Keywords: | Labor supply ; Women - Employment ; Wages |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:05-05&r=lab |
| By: | Daniel Aaronson; Eric French; James MacDonald |
| Abstract: | Using both store-level and aggregated price data from the food away from home component of the Consumer Price Index survey, we show that restaurant prices rise in response to an increase in the minimum wage. These results hold up when using several different sources of variation in the data. We interpret these findings within a model of employment determination. The model implies that minimum wage hikes cause employment to fall and prices to rise if labor markets are competitive but potentially cause employment to rise and prices to fall if labor markets are monopsonistic. Therefore, our empirical results appear to provide evidence against the hypothesis that monopsony power is important for understanding the small observed employment responses to minimum wage changes. |
| Keywords: | Labor market ; Wages ; Wages - Restaurants |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-04-21&r=lab |
| By: | Lisa Barrow; Kristin F. Butcher |
| Abstract: | From 1978 to 2000 the fraction of adult men in full-year non-employment increased from 17.1 to 21.6 percent. Previous research focused on the role of disability insurance policy and wage structure changes to explain this increase. Using Current Population Surveys from 1979 to 2003 we assess how much of the changes in full-year non-employment can be explained by demographic changes, possibly linked to health. With our empirical strategy we examine how 1978 to 2000 changes in demographic characteristics would have changed the distribution of weeks worked if policies and macroeconomic conditions remained as they were in 1978. For prime-aged men, we find changes in age, race, and ethnicity can “explain” 14 to 33 percent of the increase in full-year non-employment, without any change in policy or wage structure. For prime-aged women, changes in demographics also would have predicted increases in full-year nonemployment, when in fact we saw dramatic decreases. |
| Keywords: | Demography ; Labor policy ; Labor market |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-04-23&r=lab |
| By: | Christopher H. Wheeler |
| Abstract: | The surge in U.S. wage inequality over the past several decades is now commonly attributed to an increase in the returns paid to skill. Although theories differ with respect to why, specifically, this increase has come about, many agree that it is strongly tied to the increase in the relative supply of skilled (i.e. highly educated) workers in the U.S. labor market. A greater supply of skilled labor, for example, may have induced skill-biased technological change or generated greater stratification of workers by skill across firms or jobs. Given that metropolitan areas in the U.S. have long possessed more educated populations than non-metropolitan areas, these theories suggest that the rise in both the returns to skill and wage inequality should have been particularly pronounced in cities. Evidence from the U.S. Census over the period 1950 to 1990 supports both implications. |
| Keywords: | Wages ; Regional economics |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2004-020&r=lab |
| By: | Christopher H. Wheeler |
| Abstract: | While the productivity gains associated with the geographic concentration of industry (i.e. localization) are by now well-documented, little work has considered how those gains are distributed across individual workers. This paper offers evidence on the connection between total employment and the relative wage earnings of high- and low-skill workers (i.e. inequality) within two-digit manufacturing industries across the states and a collection of metropolitan areas in the U.S. between 1970 and 1990. Using two different measures - 90-10 percentile gaps in both overall and residual wages - I find that wage dispersion falls substantially as industry employment expands. Results from a simple decomposition of this relationship into average plant-size and plant-count components indicate overwhelmingly that average plant size is the primary driving mechanism. Although not necessarily inconsistent with theories appealing to intermediate inputs or technological spillovers, such findings are particularly supportive of Marshall's (1920) labor market pooling explanation for localization. |
| Keywords: | Wages ; Regional economics |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2004-023&r=lab |
| By: | Nobuhiro Kiyotaki; Ricardo Lagos |
| Abstract: | We develop a model of gross job and worker flows and use it to study how the wages, permanent incomes, and employment status of individual workers evolve over time. Our model helps explain various features of labor markets, such as the size and persistence of the changes in income that workers experience due to displacements or job-to-job transitions, the length of job tenures and unemployment duration, and the amount of worker turnover in excess of job reallocation. We also examine the effects that labor market institutions and public policy have on the gross flows, as well as on the resulting wage distribution, employment, and aggregate output in the equilibrium. From a theoretical standpoint, we study the extent to which the competitive equilibrium achieves an efficient allocation of resources. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:358&r=lab |
| By: | Ethan Lewis |
| Abstract: | Using detailed plant-level data from the 1988 and 1993 Surveys of Manufacturing Technology, this paper examines the impact of skill mix in U.S. local labor markets on the use and adoption of automation technologies in manufacturing. The level of automation differs widely across U.S. metropolitan areas. In both 1988 and 1993, in markets with a higher relative availability of less skilled labor, comparable plants – even plants in the same narrow (4-digit SIC) industries – used systematically less automation. Moreover, between 1988 and 1993 plants in areas experiencing faster less-skilled relative labor supply growth adopted automation technology more slowly, both overall and relative to expectations, and even de-adoption was not uncommon. This relationship is stronger when examining an arguably exogenous component of local less-skilled labor supply derived from historical regional settlement patterns of immigrants from different parts of the world. ; These results have implications for two long-standing puzzles in economics. First, they potentially explain why research has repeatedly found that immigration has little impact on the wages of competing native-born workers at the local level. It might be that the technologies of local firms – rather than the wages that they offer – respond to changes in local skill mix associated with immigration. A modified two-sector model demonstrates this theoretical possibility. Second, the results raise doubts about the extent to which the spread of new technologies have raised demand for skills, one frequently forwarded hypothesis for the cause of rising wage inequality in the United States. Causality appears to at least partly run in the opposite direction, where skill supply drives the spread of skill-complementary technology. |
| Keywords: | Immigrants ; Technology - Economic aspects ; Labor market |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:05-8&r=lab |
| By: | Holden, Steinar (Dept. of Economics, University of Oslo); Wulfsberg, Fredrik (Norges Bank) |
| Abstract: | This paper explores the existence of downward nominal wage rigidity (DNWR) in 19 OECD countries, over the period 1973–1999, using data for hourly nominal wages at industry level. Based on a novel nonparametric statistical method, which allows for country and year specific variation in both the median and the dispersion of industry wage changes, we reject the hypothesis of no DNWR. The fraction of wage cuts prevented due to DNWR has fallen over time, from 70 percent in the 1970s to 11 percent in the late 1990s, but the number of industries affected by DNWR has increased. DNWR is more prevalent when inflation is high,unemployment is low, union density is high and employment protection legislation is strict. |
| Keywords: | Downward nominal wage rigidity; OECD; employment protection legislation; wage setting |
| JEL: | C14 C15 E31 |
| Date: | 2005–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2005_010&r=lab |
| By: | Anna Maria Mayda (Georgetown University and IZA Bonn) |
| Abstract: | In this paper I empirically investigate economic and non-economic determinants of migration inflows into fourteen OECD countries by country of origin, between 1980 and 1995. The annual panel data set used makes it possible to exploit both the time-series and crosscountry variation in immigrant inflows. I focus on both supply and demand determinants of migration patterns and find results broadly consistent with the theoretical predictions of a standard international-migration model. Both first and second moments of the income distribution in the destination and origin countries shape international migration movements. In particular, I find evidence of robust and significant pull effects, that is the positive impact on immigrant inflows of improvements in the mean income opportunities in the host country. Inequality in the origin and destination economies affects the size of migration rates as predicted by Borjas (1987) selection model. Finally, among the non-economic determinants, I investigate the impact on emigration rates of geographical, cultural, and demographic factors as well as the role played by changes in destination countries’ migration policies. |
| Keywords: | international migration, push and pull factors, network effects |
| JEL: | F22 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1590&r=lab |
| By: | Robert A. Hart (University of Stirling and IZA Bonn) |
| Abstract: | The British engineering industry experienced extreme production and employment pressures during the rearmament period that preceded the Second World War and in the early war years. Did it react by placing a greater emphasis on incentive-compatible payment methods? This paper examines the relative employment and wage effects on pieceworkers and timeworkers. Empirical work is based on detailed firm-level payroll data produced by the Engineering Employers Federation covering the period 1935 to 1942. The paper investigates the effects of war on piecework and timework in relation to (a) labour market arguments concerning substitution between payment methods, (b) piece rate/time rate adjustments to changes in product demand, (c) relative changes in employment and hours, and (d) relative changes in hourly and weekly pay. |
| Keywords: | piecework, timework, British engineering, World War II |
| JEL: | J31 J33 N34 N44 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1593&r=lab |
| By: | Amit K. Bhandari (University of Kalyani); Almas Heshmati (MTT Economic Research, Seoul National University and IZA Bonn) |
| Abstract: | This study provides an empirical investigation of the adjustment process of labour in Indian manufacturing industries, which evolved through structural transformation in the era of globalization. The analysis is based on a dynamic model applied to a panel of 22 two-digit manufacturing industries for the time period of 22 years covering 1980/81 to 2001/02. We assume that as competition increases industries adjust their employment to a desired level which is both industry and time specific. The results indicate that the manufacturing sector has shown a considerable dynamism in adjusting its workforce. The long run labour demand responds greatest to the output, followed by capital and least by wages. It is observed that Indian manufacturing is not inefficient in labour use as modest speed of adjustment has led employment size closer to the optimal level. |
| Keywords: | labour use, employment, adjustment, globalization, manufacturing, India |
| JEL: | C23 J23 L60 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1596&r=lab |
| By: | Nil Demet Güngör (Middle East Technical University); Aysit Tansel (Middle East Technical University and IZA Bonn) |
| Abstract: | The study estimates an empirical model of return intentions using a dataset compiled from an internet survey of Turkish professionals and Turkish students residing abroad. In the migration literature, wage differentials are often cited as an important factor explaining skilled migration. The findings of the study suggest, however, that other factors are also important in explaining the non-return of Turkish professionals. Economic instability in Turkey is found to be an important push factor, while work experience in Turkey also increases non-return. In the student sample, higher salaries offered in the host country and lifestyle preferences, including a more organized environment in the host country, increase the probability of notreturning. For both groups, the analysis also points to the importance of prior intentions and the role of the family in the decision to return to Turkey or stay overseas. |
| Keywords: | skilled migration, brain drain, return intentions, higher education, Turkey |
| JEL: | F20 F22 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1598&r=lab |
| By: | David G. Blanchflower; Andrew J. Oswald |
| Abstract: | This paper provides evidence for the existence of a wage curve -- a micro-econometric association between the level of pay and the local unemployment rate -- in modern U.S. data. Consistent with recent evidence from more than 40 other countries, the wage curve in the United States has a long-run elasticity of approximately %uF8180.1. In line with the paper%u2019%u2019s theoretical framework: (i) wages are higher in states with more generous unemployment benefits, (ii) the perceived probability of job-finding is lower in states with higher unemployment, and (iii) employees are less happy in states that have higher unemployment. We conclude that it is reasonable to view the wage curve as an empirical law of economics. |
| JEL: | J3 E2 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11338&r=lab |
| By: | Richard Dickens (Queen Mary, University of London); Mirko Draca (Centre for Economic Performance, London School of Economics) |
| Abstract: | Initial research on the employment impact of the introduction of the National Minimum Wage has shown no evidence of any significant employment loss (Stewart, 2002, 2003, 2004). Against this background the NMW was raised substantially in October 2003 from £4.20 to £4.50 and again in October 2004 to £4.85. These are quite large increases in the NMW and they have been predicted to raise the wages for a substantial proportion of employees in the UK. Some concerns have been raised in the business community about the size of these increases, with some large employers claiming that for the first time the NMW will affect their pay structures. In this report we examine the impact of the October 2003 increase in the NMW on employment. We use a methodology first proposed by Linneman (1982) and used more recently by Stewart (2003, 2004) to examine the introduction of the minimum wage. This essentially examines individual transitions out of employment, comparing a group of workers directly affected by the NMW with a similar but unaffected group. |
| Keywords: | Minimum wages, Employment transitions, Wages. |
| JEL: | J31 J63 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp532&r=lab |
| By: | Maxim Bouev; ; |
| Abstract: | This paper analyses the emergence of the informal economy in the environment characterised by non-competitive labour markets with wage bargaining. We develop a simple extension of the standard search model à la Pissarides (2000) with formal and informal sectors to show how a government’s auditing of informal firms and barriers to firms’ entry erected in the formal sector by corrupt bureaucracy can make for stable coexistence of formal and informal jobs in the long term. In equilibrium, wage differentials for homogeneous and risk-neutral workers emerge because different types of jobs have different lifetimes and/or have different creation costs. The former are explained by the auditing activities of the government that in the simple set-up destroy informal matches, while keeping formal jobs intact; the latter are due to varying capital costs, or costs associated with red tape and bureaucratic extortion (bribing). Search frictions introduce rent sharing between firms and workers in both formal and informal sectors. This has an important implication for policy making. In particular, we show that if ceteris paribus a firms’ bargaining position vis-à-vis workers is stronger in the formal rather than in the informal sector, governments can afford to appropriate a larger part of a productive match surplus (e.g. by levying higher taxes), without endangering the qualitative outcome in the long run. Rent sharing also implies that both formal and informal sector employees may receive wages above marginal product. We investigate efficiency properties of an equilibrium with formal and informal jobs and discuss the role of the government in creating and eliminating such inefficiencies partially arising from a version of the hold-up problem (Grout, 1984). Some lessons are drawn for normative analyses of policies aimed at reduction of informality in set-ups with non-competitive labour markets. In particular, the conditions are given under which a reduction in size of the informal sector is likely to be detrimental for economic welfare. |
| Keywords: | informal economy, regulations, wage bargaining, labour markets, search models |
| JEL: | E24 H26 J31 J41 J42 J64 O17 |
| Date: | 2005–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2005-764&r=lab |
| By: | Petri Böckerman (Labour Institute for Economic Research); Markus Jäntti (Åbo Akademi) |
| Abstract: | This paper uses panel data from 1989 to 1995 on blue-collar workers in Finnish manufacturing industries and their establishments to assess the extent to which hours of work are affected by individual or establishment characteristics - observed as well as unobserved. We argue that recent research on working hours has focused almost exclusively on the supply of labor, but that insights into the extent to which hours variation is driven not by supply but by demand will affect the likelihood that supply-side policies will succeed. Our estimates suggest that both individual and establishment characteristics matter, but that establishment level effects account for the bulk of the variation in hours. |
| Keywords: | labour supply, labour demand, employment |
| JEL: | H2 J21 J22 J23 |
| Date: | 2005–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0505012&r=lab |
| By: | SK Mishra (Dept. of Economics, NEHU, Shillong); JW Lyngskor (Department of Economics, North Eastern Hill University, Shillong India) |
| Abstract: | The objective of this study is to bring out the case of poverty, undernourishment and health conditions of casual labourers in Shillong, the capital city of Meghalaya, India. A large section of the unskilled labourers work as casual workers. Casual labourers are those workers who work for a very short duration (for a few hours, a day or at most a few days under a single contract) for an employer, and who are (usually) paid for their labour either at the end of the contract or at the end of a day. Casual workers are often unskilled or semi-skilled; they usually do not own any other factors of production (such as land, capital or implements needed to perform the job) except their labour power. Casual labourers earn their livelihood by selling their labour power and often regenerate their labour power by 'investing', so to say, a very large part of their wage earning on food articles. Thus, in case of a casual labourer, the dichotomy of consumption and investment collapses into a single category. Due to low level of consumption, casual labourers are often poor performers - their efficiency is low. The market forces often impose on them the vicious circle of inefficiency - low wage rates - deficient consumption - inefficiency. The study is based on the primary data collected from 125 casual labourer households with 688 family members. Overall, it is found that casual labourer households in Shillong are poor; their per capita income (per month) is Rs. 516.6 on an average and they spend a meager amount (Rs. 252.9 only or 48.95 percent of income) on food articles yielding energy. Some 38.4 percent of these households are below poverty line (fixed at Rs. 396 per capita per month). Poorer households have larger family size. Consequently, some 46.5 percent persons in the sample households are below poverty line. The mean energy intake of these households is slightly less than 1600 calories per person per day. The average energy intake among the BPL households is a meager 1307.66 calories per person per day. Only 19 households have calorie intake larger than 2000, and of them only 14 get more than 2200 calories. Of 125 households, the majority (93) have no milk consumption. Overall, carbohydrates supply 76.5 percent of the energy intake and the contribution of proteins to the calorie intake is ranging between 9.55 and 10.64 percent across different income and food habit groups with the mean value of 10.16 percent. Irrespective of the per capita income group that they belong to, the casual labourer households, without a single exception, eat diets deficient in proteins far below the prescribed norms. Of the total number of 688 persons in 125 households, 72 (10.47 percent) are found chronically sick. Among the 72 sick persons, 56 (77.78 percent) are in the BPL income group, 34 (47.22 percent) are children in 0-14 years age group, and 23 (31.94 percent) are adult women. Among the sick, the overwhelming majority indicates nutritional deficiency. Children and women are hit most hard by the dietary imbalance in food. Logit analysis on incidence of sickness suggests that the probability of a person being sick is very high (0.5 or more) in the extremely poor households. The probability of finding a sick person at about per capita income of Rs. 600 per month is 0.10 and it declines sharply with an increase in income. |
| Keywords: | Poverty, malnutrition, nutrition, deficiency disease, Shillong, Meghalaya, India, primary data, calorie, carbohydrate, protein, fat, logit analysis |
| JEL: | I12 I31 I32 |
| Date: | 2005–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0505012&r=lab |
| By: | Amy Y.C. Liu |
| Abstract: | This paper examines the changes in relative earnings of workers with different education levels during Vietnam’s transition. It is found that females enjoy a higher return to education than males do in 1998, reversing the situation observed five years ago. A large fall in the returns to vocational training for males, amid the rapid growth in the representation of better-educated females in the private sector where education is valued higher could be responsible for what have occurred. A direct assessment of the role of demand using a simple demand and supply framework developed by Katz-Murphy (1992) is undertaken. The result suggests an increase in the relative demand for better-educated workers appears to play an important role in explaining the earnings differentials between workers of different education groups. Education reform to better suit the needs of the post-reform emerging market, on-the-job training for workers, as well as equal access to education are some policy options that hold thekey to reduce wage inequality between different education groups. |
| JEL: | I21 J31 P2 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:idc:wpaper:idec05-4&r=lab |
| By: | Kenneth Burdett (Department of Economics, University of Pennsylvania); Ricardo Lagos (New York University); Randall Wright (Department of Economics, University of Pennsylvania) |
| Abstract: | There is much discussion of the relationships between crime, inequality, and unemployment. We construct a model where all three are endogenous. We find that introducing crime into otherwise standard models of labor markets has several interesting implications. For example, it can lead to wage inequality among homogeneous workers. Also, it can generate multiple equilibria in natural but previously unexplored ways; hence two identical neighborhoods can end up with different levels of crime, inequality, and unemployment. We discuss the effects of anti-crime policies like changing jail sentences, as well as more traditional labor market policies like changing unemployment insurance. |
| Keywords: | Crime, Inequality, Unemployment, Search |
| JEL: | D83 J64 |
| Date: | 2002–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:03-029&r=lab |
| By: | Eliana Baici (SEMEQ Department - Faculty of Economics - University of Eastern Piedmont); Giorgia Casalone (SEMEQ Department - Faculty of Economics - University of Eastern Piedmont) |
| Abstract: | Since Solow’s (1957) contribution, human capital has a central role in the debate on economic growth as a leading long period development factor. If from a theoretical point of view the role of human capital on economic growth both directly and throughout its use in R&D activities is fully accepted, from an empirical perspective the results are much more controversial, strictly depending on the quality of data. A recent analysis by Aghion and Cohen (2004) put in evidence that high-level human capital has a positive effect on economic performance only if a country is close to the technological frontier: countries that are far from this frontier, specialised in traditional sectors, can growth, almost in the short run, even exploiting medium-level human capital. This analysis lead to consider the link between human capital and growth with a greater detail, trying to disclose the effect of different human capitals in a country, such as Italy, traditionally oriented toward a low/medium technology production. Using, beyond the usual proxies of human capital, some measures of its quality and of its interrelation with R&D sector, we would like to give a new contribution to the analysis of regional growth in Italy in the period 1980-2001. The panel approach, here adopted, allows us to take account of the temporal variability and to check for omitted variable specific for regions and persistent over time. |
| Keywords: | human capital, labour productivity, regional growth, panel estimations |
| JEL: | C23 J24 O40 R11 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:upo:upopwp:101&r=lab |