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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.

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?

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.

This is an original paper on this subject.

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.

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.

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

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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

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.

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.

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.

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.

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.

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.

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

Proposes an empirical analysis of regional convergence in Canada based on the growth model of Barro et al. In an open economy with perfect capital mobility, if domestic residents cannot borrow abroad with human capital as collateral, the dynamics of human capital accumulation is the driving force of per capita income growth. Empirical results indicate that, as predicted by the theoretical model, various indicators of the stock of human capital did converge at the same speed as per capita income during the 1951‐1996 period. A substantial part of the relative growth of per capita income indicators across Canadian provinces since the early 1950s could be explained by the convergence process of human capital indicators based on the percentage of the population, both sexes and males, who have at least a university degree. The estimates of the human capital share in national income based on those indicators are in the neighbourhood of 0.5, a number consistent with other measures of the implicit income share of human capital. The convergence speed of per capita income at the regional level might have been two to three times faster, if all persons had invested in education at the same rate as the young.

The aim of this paper is to extend a theoretical model due to Ljungqvist and data from a sample of 19 developing economies to empirically test it.

Data for all variables are from the 2005 Human Development Report and the 2006 World Development Report. The author applies the least‐squares estimation technique in a multivariate linear regression.

Based on data from the World Bank and the United Nations Development Programme, the paper uses a sample of 19 developing economies and finds that cross‐country variations in income/consumption inequality may be explained by inequality of investment in human capital as measured by inequalities in child health as well as inequality in education and by inequality in the distribution of land as measured by the land Gini index.

Assuming a population consisting of skilled laborers, unskilled laborers, educators/health care personnel, and farmers, the paper shows that starting from an initial distribution of assets and in the absence of a perfect capital market along with human capital exhibiting increasing returns it is possible to have persistent inequality in the distribution of income or consumption. Regression results also are consistent with the theoretical implication of the model as the extent of inequality in land distribution and in access to education as well as inequalities in child health do linearly influence income or consumption inequality as measured by the ratio of the share of income or consumption accounted for by the richest quintile to that of the poorest quintile. As a result, if governments in developing countries aim to reduce inequality, they need to implement programs designed to reduce inequalities in child health by allowing children from the poorest of the poor to get fully immunized, which in turn would lead to a reduction in infant and child mortality and in education by providing low‐income families with means so that their children have better access to education. Government land policies, on the other hand, that succeed in reducing inequality in land distribution in developing countries, may be beneficial in terms of lessening income/expenditure inequality. Finally, while the present model does not test for the impact that improving capital markets would have, it stands to reason that improving capital markets could also have an impact on decreasing inequality.

In this paper the author uses a model due to Ljungqvist to show that individuals are relatively wealthy because they either own a fixed input such as land or they are able to invest in human capital, which in turn allow them to earn sufficient rent or labor income to remain wealthy. On the other hand, poor people either do not own land or are not capable of investing in human capital, and, as a result, earn low incomes and remain poor. This joint causation of factor endowment or human capital investment and income helps explain income distribution. Using data from the United Nations Development Programme and the World Bank for a sample of 19 developing economies, it is found that cross‐country variations in income/consumption inequality may be explained by inequality of investment in human capital as measured by inequalities in child health as well as well as inequality in education and by inequality in the distribution of land as measured by the land Gini index. These results will help governments in developing countries identify areas that need to be improved upon in order to reduce income/consumption inequality.

This study aims to bring some additional insight into the issue of emigration by establishing a relationship between emigration and psychic return of citizens to their human capital investment in the country.

The article adopts a quantitative research strategy. It applies organizational commitment and human capital theories to the study of emigration.

The article provides evidence for the fact that psychic return to human capital investment in the country has significant relationship with emigration level from this country. At the same time, of all variables that comprise this type of return to HC investment, only two variables were found to be statistically significant: national GDP and access to education in the country.

The findings provide some evidence for the fact that emigration from a country cannot be reduced unless people in the country have the ability to lead an economically comfortable life and have access to education. Those countries that experience significant emigration need to turn their attention to developing and implementing sound economic and educational reforms. Emigration will be reduced as a result. A significant limitation of this research is the fact that not all the world countries were included in the analysis. Although the authors did their best to get data for as many countries as possible, the absence of data for some countries allowed for the research using fewer countries than desired.

This article utilizes organizational commitment and human capital theories. The combination of these two theories of social research allows a unique look at emigration.