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Abstract

Details

Fostering Productivity: Patterns, Determinants and Policy Implications
Type: Book
ISBN: 978-1-84950-840-7

Article
Publication date: 27 September 2011

Jialu Liu

Many countries have experienced, or are experiencing, urbanization. One such example is China. Even though the large‐scale rural‐urban migration seems chaotic on the…

1575

Abstract

Purpose

Many countries have experienced, or are experiencing, urbanization. One such example is China. Even though the large‐scale rural‐urban migration seems chaotic on the surface, there are certain underlying forces driving individual decisions. The purpose of this paper is to provide some understanding of the relationship between human capital, migration, and occupational choices.

Design/methodology/approach

The paper starts with an overlapping generations model. Human capital plays various roles across different occupations – it does not affect the income of farmers, it affects income of workers linearly, and it has increasing returns in rural non‐farm business. The paper then derives income profiles for individuals with heterogeneous human capital, and finds the human capital thresholds of occupations. The paper calibrates the model to China, and simulates the model to answer two questions: how does an improving human capital distribution affect rural wages, quantities of migrants and return migrants? How does a fast‐growing urban wage rate affect rural wages, quantities of migrants and return migrants?

Findings

First, depending on the initial human capital level, policies aiming to enhance human capital may have different impacts on migration. If the initial human capital level is low, these policies will yield more permanent migrants; on the contrary, if the initial human capital is at a relatively high level, then a shrinking permanent migrant class with a growing entrepreneur class can be expected. This results in an inverted U‐shaped relation between the initial human capital level and the size of the permanent migrant class. Second, even though the non‐farm business of return migrants helps raise rural wages, the income inequality between rural and urban areas is not eliminated and migration is persistent. Third, borrowing constraints limit the size of rural non‐farm businesses and slow down the development of rural industry. The fourth and final point is that, migration costs discourage labor mobility and reduce the quantities of both permanent migrants and entrepreneurs.

Originality/value

This is an original paper on this subject.

Details

Indian Growth and Development Review, vol. 4 no. 2
Type: Research Article
ISSN: 1753-8254

Keywords

Book part
Publication date: 10 November 2014

Matthias Cinyabuguma, William Lord and Christelle Viauroux

This paper addresses revolutionary changes in the education, fertility and market work of U.S. families formed in the 1870s–1920s: Fertility fell from 5.3 to 2.6; the…

Abstract

This paper addresses revolutionary changes in the education, fertility and market work of U.S. families formed in the 1870s–1920s: Fertility fell from 5.3 to 2.6; the graduation rate of their children increased from 7% to 50%; and the fraction of adulthood wives devoted to market-oriented work increased from 7% to 23% (by one measure).

These trends are addressed within a unified framework to examine the ability of several proposed mechanisms to quantitatively replicate these changes. Based on careful calibration, the choices of successive generations of representative husband-and-wife households over the quantity and quality of their children, household production, and the extent of mother’s involvement in market-oriented production are simulated.

Rising wages, declining mortality, a declining gender wage gap, and increased efficiency and public provision of schooling cannot, individually or in combination, reduce fertility or increase stocks of human capital to levels seen in the data. The best fit of the model to the data also involves: (1) a decreased tendency among parents to view potential earnings of children as the property of parents and (2) rising consumption shares per dependent child.

Greater attention should be given the determinants of parental control of the work and earnings of children for this period.

One contribution is the gathering of information and strategies necessary to establish an initial baseline, and the time paths for parameters and targets for this period beset with data limitations. A second contribution is identifying the contributions of various mechanisms toward reaching those calibration targets.

Details

Factors Affecting Worker Well-being: The Impact of Change in the Labor Market
Type: Book
ISBN: 978-1-78441-150-3

Keywords

Article
Publication date: 1 February 2003

Andrew Clark

Russia has undergone tumultuous changes during the transition process. This has been nowhere more evident than within the labour market. The transition has now progressed…

1176

Abstract

Russia has undergone tumultuous changes during the transition process. This has been nowhere more evident than within the labour market. The transition has now progressed to such an extent that it is possible to examine whether the issues of a re‐capitalisation and restructuring of human capital have been addressed. This paper uses the Russian Longitudinal Monitoring Survey to assess rates of return to human capital investments for the years 1994‐1998. It utilises standard earnings functions to assess the returns to education as well as to specific levels of post‐compulsory education and training. This article places specific emphasis on firm level training and the role of the firm, for the purpose of this special issue. Results suggest, in the case of Russia, that significant and positive returns to education and training exist comparable in magnitude to those in other transition countries.

Details

International Journal of Manpower, vol. 24 no. 1
Type: Research Article
ISSN: 0143-7720

Keywords

Article
Publication date: 5 September 2008

Vladimir Kuhl Teles and Joaquim Andrade

The main purpose of this paper is to visualize the relation between government spending on basic education and the human capital accumulation process, observing the…

3781

Abstract

Purpose

The main purpose of this paper is to visualize the relation between government spending on basic education and the human capital accumulation process, observing the impacts of this spending on individual investments in higher education, and on economic growth.

Design/methodology/approach

The paper uses an overlapping‐generations model where the government tax the adult generation and spent it in basic education of the next generations.

Findings

It was demonstrated that the magnitude of the marginal effect of government spending in basic education on growth crucially depends on public budget constrains.

Originality/value

The paper explains why some countries with a lot of public investment in basic education growth at low rates. In that sense if a country has only a lot of public investment in basic education without investment in higher education it may growth at low rates because the taxation can cause distortions in the agents incentives to invest in higher education.

Details

Journal of Economic Studies, vol. 35 no. 4
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 1 May 2012

Andrew H. Chen and John W. Kensinger

Although employee stock ownership may result in increased cash flows due to enhanced organizational productivity or improved governance, this benefit is counterbalanced by…

Abstract

Although employee stock ownership may result in increased cash flows due to enhanced organizational productivity or improved governance, this benefit is counterbalanced by the increased risk premium due to a higher correlation between the returns to the firm and the returns to human capital in general. For corporations that employ people with commonplace skills, employee stock ownership results in increased systematic risk, so the optimal level of employee stock ownership is small. When skills are unique, however (so the returns have low correlation with the returns to human capital in general), the optimal level of employee stock ownership is high, with strong incentives for outsourcing – not just the routine easily repeatable tasks but also research, product development, and other highly specialized tasks requiring knowledge not present within the firm. These conclusions hold even without conflicts of interest between owners and employees, but are strengthened in the presence of such conflicts. Incentives for greater employee ownership are further strengthened by the higher costs of becoming or remaining a public corporation that have been imposed by the Sarbanes–Oxley Act of 2002. This analysis provides a framework for optimizing employee incentives from stock ownership.

Details

Research in Finance
Type: Book
ISBN: 978-1-78052-752-9

Article
Publication date: 14 October 2013

Mona Soufian, David McMillan and Stuart Horsburgh

The paper examines the conditional capital asset pricing model (CCAPM) of Jagannathan and Wang using the UK data and develops a data-driven measure of beta instability…

552

Abstract

Purpose

The paper examines the conditional capital asset pricing model (CCAPM) of Jagannathan and Wang using the UK data and develops a data-driven measure of beta instability risk that is pertinent to the UK stock market. In contrast to the view that the main part of the Jagannathan and Wang's model is the inclusion of human capital, however, the paper finds that human capital remains insignificant in most tests.

Design/methodology/approach

Data were taken from the London Share Price Database and Datastream. This paper therefore examines the premium labour (PL) model of Jagannathan and Wang using the UK data, while the paper attaches particular importance to the measure of beta instability as a source of time variation in betas. In analysing the measure of beta instability risk, this study considers a testable measure of instability risk that varies across markets and across time as the interaction between the stock market and the economy varies across different time periods. Hence, this paper develops a data-driven measure of beta instability risk that is pertinent to the UK stock market.

Findings

The results confirm the premium version of the model, that is, the CCAPM without a proxy for human capital. In particular, the paper finds that over the entire time period of this study, the measure for beta instability risk and market portfolio has significant explanatory power for the variations of returns. More specifically, when using the average earnings index as a proxy for human capital in the PL model, the premium model performs better than the PL model. When total income from employment is used as a proxy for human capital, the performance of the PL model improves for the full period. However, the results for the two sub-periods are less favourable for the PL model as, again, labour income is not priced for these periods. These results indicate that the PL model is sensitive to proxies used for human capital.

Originality/value

The results revive the importance of beta instability risk in CCAPM of Jagannathan and Wang's model and suggest that the beta instability drives this model.

Article
Publication date: 12 January 2010

Giuseppina Autiero and Concetto Paolo Vinci

The purpose of this paper is to analyze the causal link between government regulation of religion and the choice of investing in human and physical capital.

1427

Abstract

Purpose

The purpose of this paper is to analyze the causal link between government regulation of religion and the choice of investing in human and physical capital.

Design/methodology/approach

The paper uses an analytical model with a government setting the output quota to transfer to religious activities. This depends on the extent to which it is an ideological government that uses religion either for legitimacy aims or for the ideological control of population. Workers and entrepreneurs observe the quota and simultaneously choose the investment in human and physical capital, which may trigger, à la Acemoglu, social increasing returns.

Findings

Directing resources to religious activities may be detrimental to output performance. This may occur if an ideological government sets the optimal quota above the quotas preferred by private agents. This negatively affects the investment in physical and human capital and output performance.

Originality/value

Despite the importance of government regulation of religion in the literature, its effect on output performance has not been thoroughly analyzed yet. In this respect, the paper aims to further investigate the causal links between religion regulation related to government type and the investments in human and physical capital and the output level.

Details

International Journal of Social Economics, vol. 37 no. 2
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 12 July 2011

Inés P. Murillo

The main objective of this paper is to analyse the link between human capital depreciation and the educational level of Spanish salaried workers.

Abstract

Purpose

The main objective of this paper is to analyse the link between human capital depreciation and the educational level of Spanish salaried workers.

Design/methodology/approach

Wage equations are estimated by sector and occupation, following the empirical framework proposed by Neuman and Weiss. Data in this study refer to the Spanish labour market, using two cross‐sectional employee‐firm matched data.

Findings

The estimates provided in this paper suggest that human capital depreciation rates are not homogeneous for the whole sample; in contrast, they vary across educational levels, being greater as the workers' school attainment increases.

Research limitations/implications

The main restriction of the paper is the limited availability of quality longitudinal data to estimate human capital depreciation.

Practical implications

Knowledge acquired by workers may quickly become obsolete in a context of technological change. Thus, the paper's main findings support the need for ongoing training programs to update workers' skills to changing market requirements.

Originality/value

The added value of this paper is two‐fold. On the one hand, returns to education and human capital depreciation for the Spanish labour force are estimated using a pseudo‐panel created from two cross‐sectional data bases. On the other hand, earnings equations are estimated by sector and occupation in order to calculate human capital depreciation rates; this procedure allows the authors to take into account the worker's occupation and their level of education as well as technological differences associated with their job.

Details

International Journal of Manpower, vol. 32 no. 4
Type: Research Article
ISSN: 0143-7720

Keywords

Article
Publication date: 22 June 2010

Philip Broyles and Weston Fenner

The purpose of this paper is to examine how human capital affects the racial wage gap of science, technology, engineering, and mathematics (STEM) professionals…

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Abstract

Purpose

The purpose of this paper is to examine how human capital affects the racial wage gap of science, technology, engineering, and mathematics (STEM) professionals, controlling for labor market characteristics and argue that human capital of minority STEM professionals is valued less than their White counterparts, even when minorities have similar levels of human capital.

Design/methodology/approach

Data for this study were obtained from the American Chemical Society (ACS) 2005 census of its membership and consisted of 13,855 male chemists working full‐time in industry – there were too few minority women to make comparisons. The racial wage gap was decomposed by modeling earnings as an exponential function of race, education, marital status, children, experience, employment disruption, work specialty, work function, industry, size of employer, and region of work.

Findings

This research shows that there is racial discrimination in STEM professions. Although there is variation among racial groups, minority chemists receive lower wages than White chemists. For Asian and Black chemists, the wage differential is largely due to discrimination. The case may be different for Hispanic chemists. Most of the difference in wages between Hispanics and Whites was explained by the lower educational attainment and experience of Hispanic chemists.

Practical implications

Because the racial wage gap is largely due to racial differences in the return on human capital, public and private efforts to increase human capital of potential minority scientists have a limited impact on the racial wage gap. Eliminating the differential returns to human capital would drastically reduce the racial wage gap – except for Hispanics. Achieving racial pay equity is one important step towards eliminating racial discrimination in the STEM workforce.

Originality/value

This paper shows the role of human capital in explaining the racial wage gap in STEM professions.

Details

International Journal of Sociology and Social Policy, vol. 30 no. 5/6
Type: Research Article
ISSN: 0144-333X

Keywords

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