Showing papers on "Human capital published in 1989"
Posted Content•
TL;DR: In this paper, the authors show that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.
Abstract: Growth in this model is driven by technological change that arises from intentional investment decisions made by profit maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported, and instead, the equilibriumis one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.
11,095 citations
Posted Content•
TL;DR: In this article, a theoretical framework for thinking about the role of human capital in a model of endogenous growth is presented. But the emphasis on the level of an input contrasts with the usual emphasis from growth accounting on rates of change of inputs.
Abstract: This paper outlines a theoretical framework for thinking about the role of human capital in a model of endogenous growth. The framework pays particular attention to two questions: What are the theoretical differences between intangibles like education and experience on the one hand, and knowledge or science on the other? and How do knowledge and science actually affect production? One implication derived from this framework is that the initial level of a variable like literacy may be important for understanding subsequent growth. This emphasis on the level of an input contrasts with the usual emphasis from growth accounting on rates of change of inputs. The principal empirical finding is that literacy has no additional explanatory power in a cross-country regression of growth rates on investment and other variables, but consistent with the model, the initial level of literacy does help predict the subsequent rate of investment, and indirectly, the rate of growth.
1,201 citations
Posted Content•
TL;DR: In this paper, the authors show that a country's per capita growth rate tends to be inversely related to its initial level of income per person, and that countries with higher human capital also have lower fertility rates and higher ratios of physical investment to GDP.
Abstract: In neoclassical growth models with diminishing returns to capital, a country's per capita growth rate tends to be inversely related to its initial level of income per person. This convergence hypothesis seems to be inconsistent with the cross-country evidence, which indicates that per capita growth rates for about 100 countries in the post-World War II period are uncorrelated with the starting level of per capita product. However, if one holds constant measures of initial human capital-measured by primary and secondary school-enrollment rates - there is evidence that countries with lower per capita product tend to grow faster. Countries with higher human capital also have lower fertility rates and higher ratios of physical investment to GDP. These results on growth, fertility, and investment are consistent with some recent theories of endogenous economic growth. With regard to government, the cross-country data indicate that government consumption is inversely related to growth, whereas public investment has little relation with growth. Average growth rates are positively related to political stability, which may capture the benefits of secure property rights. There is also some indication that distortions of investment-goods prices are adverse for growth. Finally, the analysis leaves unexplained a good deal of the relatively weak growth performances of countries in sub- Saharan Africa and Latin America.
585 citations
TL;DR: This article explored the causes and consequences of these market failures and the failure of private non-market solutions, and suggested possible roles for government intervention and suggested that market failures may be ameliorated by nonmarket institutions.
Abstract: A central question in development economics is, how can we account for differences in the levels of income and the rates of growth between the developed and less developed economies? In the 1950s and 1960s, there was a standard answer to this question: the poor are just like the rich, except they are poorer-they have less human and nonhuman capital. There was an immediate prescription for this diagnosis: increase the resources of LDCs, either by transferring capital to them (either direct aid or education) or by encouraging them to save more. Today, these answers seem less convincing that they did two decades ago. If the problem were primarily a shortage of physical capital, the return to capital should be much higher in LDCs than in developed countries, and the natural avarice of capitalists would lead to a flow of capital from the more developed to the less developed economies (see Howard Pack, 1984 and my 1988 paper). If the problem were primarily a shortage of human capital, then the educated in LDCs should receive a higher (absolute as well as relative) income than the educated in more developed economies. How then can we account for high levels of unemployment among the educated and the migration of the educated from LDCs to more developed economies? Moreover, the predictions of the standard neoclassical growth model, of a convergence of growth rates in per capita income, with permanent differences in per capita consumption being explained by differences in savings rates and reproduction rates, do not seem to have been borne out. These observations suggest that the LDCs differ from the developed countries in at least some other important respects, and this view is corroborated by those studies which have looked at the productivity of similar plants operating in developed and less developed economies. (See Pack, 1984; 1987.) The difference can be attributed, perhaps tautologically, to differences in economic organization, to how individuals (factors of production) interact, and to the institutions which mediate those interactions. Among the most important of these "institutions" are markets. It is by now well recognized that there are many instances of market failures in more developed economies (see Bruce Greenwald and myself, 1986). In some cases, market failures may be ameliorated by nonmarket institutions. If, for instance, capital markets do not function well ("perfectly"), if only because of costly and imperfect information, nonmarket institutions (internal capital markets within large conglomerates) may develop.' Market failure is more prevalent in LDCs, and the nonmarket institutions that ameliorate its consequences are, at least in many instances, less successful in doing so. The objective of this paper is to explore the causes and consequences of these market failures and the failure of private nonmarket solutions, and to suggest possible roles for government intervention. tDiscussants: Anne 0. Krueger, Duke University; Stanley Fischer, World Bank.
574 citations
Posted Content•
TL;DR: In this paper, the authors consider the prospects for constructing a neoclassical theory of growth and international trade that is consistent with some of the main features of economic development, and compare three models and compared to evidence.
Abstract: This paper considers the prospects for constructing a neoclassical theory of growth and international trade that is consistent with some of the main features of economic development. Three models are considered and compared to evidence: a model emphasizing physical capital accumulation and technological change, a model emphasizing human capital accumulation through schooling, and a model emphasizing specialized human capital accumulation through learning-by-doing.
560 citations
Posted Content•
TL;DR: In this paper, the authors show that a country's per capita growth rate tends to be inversely related to its initial level of income per person, and that countries with higher human capital also have lower fertility rates and higher ratios of physical investment to GDP.
Abstract: In neoclassical growth models with diminishing returns to capital, a country's per capita growth rate tends to be inversely related to its initial level of income per person. This convergence hypothesis seems to be inconsistent with the cross-country evidence, which indicates that per capita growth rates for about 100 countries in the post-World War II period are uncorrelated with the starting level of per capita product. However, if one holds constant measures of initial human capital-measured by primary and secondary school-enrollment rates - there is evidence that countries with lower per capita product tend to grow faster. Countries with higher human capital also have lower fertility rates and higher ratios of physical investment to GDP. These results on growth, fertility, and investment are consistent with some recent theories of endogenous economic growth. With regard to government, the cross-country data indicate that government consumption is inversely related to growth, whereas public investment has little relation with growth. Average growth rates are positively related to political stability, which may capture the benefits of secure property rights. There is also some indication that distortions of investment-goods prices are adverse for growth. Finally, the analysis leaves unexplained a good deal of the relatively weak growth performances of countries in sub- Saharan Africa and Latin America.
450 citations
Posted Content•
TL;DR: In this paper, the authors examined the predicted relationships of endogenous economic growth, investment in physical and human capital, and population growth using a cross-country sample that expands on the Summers-Heston set of about 120 countries.
Abstract: Models of endogenous economic growth can generate long-term growth without relying on exogenous changes in technology or population. A general feature of these models is the presence of constant or increasing returns in the factors that can be accumulated. I use some models of this type to study the determination of per capita growth, investment in physical and human capital, and population growth. The determinants of these variables involve aspects of government policy - including public infrastructure services, maintenance of property rights, government consumption, and taxation - and the initial level of per capita income. I examine the predicted relationships by using a cross-country sample that expands on the Summers-Heston set of about 120 countries. Aside from their data on levels of per capita GDP and the breakdown of GDP into components, I have added information about the composition of government expenditures, proxies for economic freedom and property rights, measures of political stability, and so on. This expansion in variables reduced the number of countries to 72. The findings verify some of the predictions about the determination of growth and investment/saving rates. For example, government consumption and investment spending, and proxies for economic freedom show up as suggested by the models. Also, the interplay among population growth, investment in human capital (school enrollment), and the initial level of per capita income confirm theoretical predictions about the tradeoff between the quantity and quality of children. I anticipate that additional results will emerge from my ongoing research in this area.
428 citations
TL;DR: This article studied the case of the Chinese enclave in New York City, using three distinct operational definitions of the enclave-as a place of residence, place of work, and industrial sector, finding that there is considerable evidence of positive returns for earnings for male enclave workers from education, labor market experience, and English-language ability.
Abstract: This study addresses a recent controversy over the character of labor markets in enclave economies: does the enclave provide positive earnings-returns to educational and other human capital characteristics to immigrant minority-group workers? We study the case of the Chinese enclave in New York City, using three distinct operational definitions of the enclave-as a place of residence, place of work, and industrial sector. Regardless of the definition employed, there is considerable evidence of positive returns for earnings for male enclave workers from education, labor market experience, and English-language ability. By contrast, none of these human capital variables is positively related to income of female enclave workers. Implications of these results for comparative research are suggested.
345 citations
Book•
01 Jan 1989
TL;DR: Moore and Simon as mentioned in this paper studied the demographic dimensions of immigration into the United States and the effects of immigration on the public Coffers and found that the overall effect of immigrants upon Natives' standard of living was greater than that of native workers.
Abstract: 1. Introduction and Summary. 2. Some General Theory of Immigration's Consequences. 3. The Demographic Dimensions of Immigration into the United States. 4. Behavioral Characteristics of Immigrants. 5. Effects of Immigrants upon the Public Coffers. 6. How Much Welfare and Public Services Do Immigrants (and Natives) use? 7. The Effect on Natives' Incomes from Immigrants' Use of Capital Goods. 8. The Effects on Technology, Productivity and Native Human Capital. 9. Impacts upon Natural Resources and the Environment. 10. The Overall Effect of Immigrants upon Natives' Standard of Living. 11. Job Displacement: Theory of Immigrants and Native Unemployment. 12. Empirical Studies of Labor Market Effects. 13. The Effects of Immigrants upon Income Distribution. 14. The Sending Countries, the Immigrants Themselves, and the World as a Whole. 15. The `Question' of Illegal Immigrants and Guestworkers. 16. Evaluation of Immigrant Policies. 17. Conclusions and Summary of Main Findings. Appendix A: Are There Grounds for Limiting Immigration? Appendix B: Public Opinion Toward Immigration. Appendix C: Views of Economists and Other Social Scientists Toward Immigration by Stephen Moore and Julian L. Simon. Appendix D: Immigration, International Relations and National Security.
330 citations
TL;DR: The human capital explanation for the wage-seniority relationship has become controversial in recent years, in part because implicit contract theories predict that compensation will be redistributed over the period of the contract as discussed by the authors.
Abstract: Why does a worker's wage tend to grow with seniority in the firm, and what does this have to do with productivity? Two decades ago, neoclassical labor economists thought that the theory of human capital provided a good answer to this question. The last decade has, however, been one of puzzles and doubt. At this point few would give an unambiguous answer. And much hinges on the answer. An attractive feature of human capital theory is that it yields a consistent and coherent explanation for several aspects of the employer-employee relationship. For example, seniority systems, layoff policies that vary with skill, and the relationship between tenure and turnover can be explained in terms of human capital. The fact that these explanations are connected leads, however, to something like a domino effect: doubts about one cast doubt on the others. If the human capital explanation for the wage-seniority relationship is flawed, then human capital explanations for other phenomena may require reevaluation. In addition, an important body of empirical research is built around the assumption that, at any point in time, a person's wage indicates the person's productivity. Included here is the extensive literature on the human capital earnings function, as well as work on labor demand, market discrimination, and compensating differentials. That assumption has become controversial in recent years, in part because implicit contract theories predict that compensation will be redistributed over the period of the contract. If a person's spot wage has little to do with spot productivity, but rather is an instrument of a complex insurance or deferred compensation scheme, then a reassessment of the empirical research may be necessary.
229 citations
TL;DR: The authors assesses the contribution of federal antidiscrimination policy to the dramatic improvement of black economic status in manufacturing that occurred in South Carolina in the mid 1960's using a unique data source.
Abstract: This paper assesses the contribution of federal antidiscrimination policy to the dramatic improvement of black economic status in manufacturing that occurred in South Carolina in the mid 1960's. Using a unique data source on wages and employment by race and sex in South Carolina we evaluate competing explanations. Human capital stories, supply shift stories and tight labor market stories do not account for the black breakthrough. Our study documents a significant contribution of federal antidiscrimination programs.
TL;DR: In this article, the relative influence of transaction-specific investments in physical and human capital on the pattern of vertical integration using new data obtained directly from U.S. auto manufacturers was investigated.
Abstract: Recent refinements in the theory of the firm suggest that organization form may be sensitive not only to the degree to which assets are specific to a transaction but also to the type of capital employed. This paper reports evidence regarding the relative influence of transaction-specific investments in physical and human capital on the pattern of vertical integration using new data obtained directly from U.S. auto manufacturers. The results support the proposition that investments in specialized technical know-how have a stronger influence than those in specialized physical capital on the decision to integrate production within the firm.
TL;DR: An international perspective in regard to female participation in the labor force is given since trends vary widely among countries and estimates of labor reserves and projections of supply focus mostly on women.
Abstract: In most economies women are less attached than men to the labor force. This has important implications for development. This article examines definitions and theories of female labor supply and related them to statistical evidence from 136 countries in the early 1980s. The findings support the view that, during the transformation from an agrarian subsistence economy, the participation of women in the labor force initially decreases and picks up later after a critical level of development has been achieved. Education is seen as a potential booster of the officially recorded female labor supply in developing countries.
Posted Content•
TL;DR: In this paper, a theoretical framework for thinking about the role of human capital in a model of endogenous growth is presented. But the emphasis on the level of an input contrasts with the usual emphasis from growth accounting on rates of change of inputs.
Abstract: This paper outlines a theoretical framework for thinking about the role of human capital in a model of endogenous growth. The framework pays particular attention to two questions: What are the theoretical differences between intangibles like education and experience on the one hand, and knowledge or science on the other? and How do knowledge and science actually affect production? One implication derived from this framework is that the initial level of a variable like literacy may be important for understanding subsequent growth. This emphasis on the level of an input contrasts with the usual emphasis from growth accounting on rates of change of inputs. The principal empirical finding is that literacy has no additional explanatory power in a cross-country regression of growth rates on investment and other variables, but consistent with the model, the initial level of literacy does help predict the subsequent rate of investment, and indirectly, the rate of growth.
TL;DR: In this paper, the authors present an analytical model of labor specialization and show that workers make human capital investment decisions on the depth and the breadth of their skill, and that workers invest more for the depth of their human capital and less for the breadth as the size of the labor market increases.
Abstract: This paper presents an analytical model of labor specialization Workers make human capital investment decisions on the depth and the breadth of their skill Given that firms have diverse job requirements and increasing returns to scale, workers invest more for the depth of their human capital and less for the breadth as the size of the labor market increases Also, the larger the size of the market, the more varieties of job requirements are used so that the average match between a worker and a firm improves
Book•
01 Jan 1989
TL;DR: All of the standard topics of intermediate price theory are included, as well as many innovative topics, such as alternative normative criteria, efficient asset markets, contestable markets, antitrust law, human capital, demand for public goods, and more.
Abstract: By the successful author of "The Armchair Economist" (a popular trade book that explains basic economics to the general public), this book makes intermediate microeconomics fun and intellectually challenging. The writing style provides an exceptionally friendly and application-rich presentation, combined with a rigorous and careful development of microeconomics theory. All of the standard topics of intermediate price theory are included, as well as many innovative topics, such as alternative normative criteria, efficient asset markets, contestable markets, antitrust law, human capital, demand for public goods, and more. A unique unifying theme of social welfare is used throughout. The inclusion of higher-level mathematics is minimal.
TL;DR: In this paper, the authors present evidence on the over-time behavior of the rate of return to investment in education in a large number of countries, and the emerging pattern is one of declining returns through time, a fact that is interpreted in the context of alternative theories on the relationship between education and earnings, such as human capital, screening, labor market segmentation and the maintenance of the status quo from generation to generation.
TL;DR: After controlling for acquired human capital and other attributes of medical school applicants, this paper cannot reject nepotism as a cause-children of doctors are nearly 14 percent more likely to be admitted into medical school than are comparable nonfollowers.
Abstract: In this paper we document a statistically significant, marginally greater probability of admittance into (at least one) medical school for children of doctors as compared to children of non-doctors. This fact can plausibly be explained as resulting from nepotism, in various forms, as well as from human capital transfers from first to (would-be) second generation doctors. After controlling for acquired human capital and other attributes of medical school applicants, we cannot reject nepotism as a cause-children of doctors are nearly 14 percent more likely to be admitted into medical school than are comparable nonfollowers.
TL;DR: In this paper, the effects of several economic, demographic, social, and regional factors on the educational attainment of Brazilian children between the ages of 7 and 14 years were explored, focusing on the determinants of school participation, grade attainment, and dropping out of school.
Abstract: It is now widely acknowledged that the low human capital base is the most serious developmental constraint in developing countries.1 Investments in child schooling add to the stock of human capital and therefore to future income and living standards for society as a whole and among subgroups of the population. Families invest in children's education for many reasons, among them the expectation that education will increase the child's future earnings. Governments also invest in education in order to raise the skill level of the labor force and, hence, to increase worker productivity and income in society at large. Thus, the analysis of the determinants of investment in schooling among different subgroups in the population and levels of education attained are of major concern for policymakers. This study explores the effects of several economic, demographic, social, and regional factors on the educational attainment of Brazilian children between the ages of 7 and 14 years. In particular, it examines the determinants of school participation, grade attainment, and dropping out of school. The data came from the 3% public use national sample of the 1980 Brazilian Population Census containing 3,526,000 individuals in 808,000 households.2 Out of this large data base a random subsample was drawn of 200,000 individuals in 40,000 households, selected so as to represent all Brazilian states and urban and rural areas. From this latter subsample we obtained a subset of 23,700 children aged 7 to 14 to whom we matched their parental and household data. The following section gives some background information on Brazil. Section III describes in more detail the sample used in this analysis. Section IV focuses on the determinants of school participation. Section V examines the impact of household and regional charac-
TL;DR: In this paper, a dynamic model of labor supply under uncertainty with endogenous human capital accumulation is developed and estimated using 1968-81 Panel Study of Income Dynamics male panel data using learning-by-doing technology for human capital investment.
Abstract: A dynamic model of labor supply under uncertainty with endogenous human capital accumulation is developed and estimated using 1968-81 Panel Study of Income Dynamics male panel data. Given a learning-by-doing technology for human capital investment and a translog utility function, structural parameters for preferences and technology are estimated from the orthogonality conditions implied by the Euler equations assuming rational expectations. The parameter estimates conform to economic theory. Simulations of the model suggest that the intertemporal labor supply elasticity with endogenous wages will rise over the lifecycle, producing different policy implications than typical models with exogenous wages and constant intertemporal elasticities. Copyright 1989 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
TL;DR: In this paper, a quantitative estimate of parental non-altruism is derived from an equilibrium labor market model: approximately 90 percent of all child earnings was implicitly competed away through lower adult wages as families migrated to areas with abundant child labor opportunities.
Abstract: Intergenerational relationships within late nineteenth-century industrial families are analyzed using several large-scale, contemporary household surveys. Nonaltruistic behavior by parents was pervasive. Even among families with positive assets, child labor was common in certain industrial settings, suggesting that child labor (or nonschooling) did not simply reflect parental borrowing constraints. Neither did physical asset transfers offset human capital losses among working youth. A quantitative estimate of parental nonaltruism is derived from an equilibrium labor market model: approximately 90 percent of all child earnings was implicitly competed away through lower adult wages as families migrated to areas with abundant child labor opportunities.
TL;DR: In this paper, the authors investigated survey data on the prevalence of on-the-job training and the effects of this labor market experience on workers' wages, wage growth, turnover, and employment.
Abstract: Several studies have investigated survey data on the prevalence of on-the-job training. These studies have sought to discover who receives training and the effects of this labor market experience on workers' wages, wage growth, turnover, and employment. What is the magnitude of workers' and employers' investments in job training? How profitable are such investments? The first part of the article considers these questions. The second reviews studies that provide recent measures of technological change by industry, such as productivity growth indexes or research and development expenditures. The studies explore effects of technological changes on demands for educated and trained workers and on consequent changes in wage structures, labor turnover, and unemployment.
TL;DR: In this article, the effects of differential pace of technological changes on industry demands for educated and trained workers as reflected in PSID data covering the 1968 to 1983 period are explored. But, as newer vintages of capital contain new technology, the skill bias of capital intensity partly reflects the skill biases of technology.
Abstract: In a broad sense, the relation of human capital to economic growth is reciprocal. This study focuses more narrowly on labor market consequences of human capital adjustments to the pace of technological change. Using Jorgensons multifactor productivity growth indexes for industrial sectors in the 1960's and 1970's the study explores effects of differential pace of technological changes on industry demands for educated and trained workers as reflected in PSID data covering the 1968 to 1983 period. The findings show relative increases both in quantity demanded (utilization) and in price (wages) of skilled workers in the more progressive sectors. Steeper wage profiles, lesser turnover, and lesser unemployment characterize labor in sectors whose productivity grew faster in preceding years. The growth of sectoral capital intensity produces similar effects. But, as newer vintages of capital contain new technology, the skill bias of capital intensity partly reflects the skill bias of technology.
Posted Content•
TL;DR: In this paper, the authors examined the predicted relationships of endogenous economic growth, investment in physical and human capital, and population growth using a cross-country sample that expands on the Summers-Heston set of about 120 countries.
Abstract: Models of endogenous economic growth can generate long-term growth without relying on exogenous changes in technology or population. A general feature of these models is the presence of constant or increasing returns in the factors that can be accumulated. I use some models of this type to study the determination of per capita growth, investment in physical and human capital, and population growth. The determinants of these variables involve aspects of government policy - including public infrastructure services, maintenance of property rights, government consumption, and taxation - and the initial level of per capita income. I examine the predicted relationships by using a cross-country sample that expands on the Summers-Heston set of about 120 countries. Aside from their data on levels of per capita GDP and the breakdown of GDP into components, I have added information about the composition of government expenditures, proxies for economic freedom and property rights, measures of political stability, and so on. This expansion in variables reduced the number of countries to 72. The findings verify some of the predictions about the determination of growth and investment/saving rates. For example, government consumption and investment spending, and proxies for economic freedom show up as suggested by the models. Also, the interplay among population growth, investment in human capital (school enrollment), and the initial level of per capita income confirm theoretical predictions about the tradeoff between the quantity and quality of children. I anticipate that additional results will emerge from my ongoing research in this area.
Posted Content•
TL;DR: In this paper, the authors explore how explicit incorporation of human capital affects dynamic general equilibrium analysis of the effects of taxes on capital formation and welfare in a life-cycle growth model and find that estimates of the full dynamic welfare costs of capital income taxes are little affected by incorporating human capital.
Abstract: This paper explores how explicit incorporation of human capital affects dynamic general equilibrium analysis of the effects of taxes on capital formation and welfare in a life-cycle growth model. In contrast to the results of partial equilibrium analysis, we find that estimates of the full dynamic welfare costs of capital income taxes are little affected by incorporating human capital. While the short-run impact effects of replacing income taxes with wage or consumption taxes are significantly affected by endogenizing human capital, these effects are short-lived. In the long-run the rate of return on non-human capital falls to approximately its initial net of tax level, and steady-state human capital investment plans are therefore little affected by the tax changes. Although incorporating human capital thus does not greatly alter results in our numerical simulations, a wide range of extensions and modifications of the model are discussed which could in principle modify this conclusion.
TL;DR: In this article, the authors developed a model showing that people who have flexibility in choosing how much to work will prefer to invest substantially more of their money in risky assets than if they had no such flexibility.
Abstract: This paper develops a model showing that people who have flexibility in choosing how much to work will prefer to invest substantially more of their money in risky assets than if they had no such flexibility Viewed in this way, labor supply flexibility offers insurance against adverse investment outcomes The model provides support for the conventional wisdom that the young can tolerate more risk in their investment portfolios than the old The model has other implications for the study of household financial behavior over the life cycle It implies that households will take account of the value of labor supply flexibility in deciding how much to invest in their own human capital and when to retire At the macro level it implies that people will have a labor supply response to shocks in the financial markets
TL;DR: The authors examined the changing comparative advantage of Japan and the United States in manufactured goods and found that during the period 1967-1983 Japan's pattern of specialization in manufactures is found to have changed dramatically with Japan shifting from specialization in unskilled labor intensive goods to human capital and research and development intensive products.
Abstract: This paper examines the changing comparative advantage of Japan and the United States in manufactured goods. The structure of comparative advantage across 167 manufactured product categories in the two countries is estimated econometrically as a function of interindustry differences in factor intensities. During the period 1967–1983 Japan's pattern of specialization in manufactures is found to have changed dramatically with Japan shifting from specialization in unskilled labor intensive goods to human capital and research and development intensive products. The United States maintained its specialization in physical capital, human capital, and research and development intensive goods. Finally, changes in the pattern of trade in high technology products in each of the two countries are analyzed, and the implications of these results for future patterns of specialization are indicated.
TL;DR: The authors surveys research on the role of schooling and human capital in fostering productivity and economic growth and argues that the returns to human capital are extremely large, certainly larger than the return to most types of physical capital.
TL;DR: Robinson has clearly pointed out that although, as SGD are attempting to argue, the distinction between human capital and welfare economics based methods of valuing benefits of public health programs “is usually drawn in terms of reliable numbers for one and theoretical desirability for the other”, the important differences between the two methods are due to their connections with two distinct interpretations of the role of government in a democratic society.
TL;DR: Impacts of the quantity and quality of immigration on the destination economy are analyzed, including impacts on value added, wages, quasi rents, rates of return, and the skill distribution of the native labor force.
Abstract: Implications of the quantity (number) and quality (skill) of immigration on the destination economy are analyzed, including impacts on value added, wages, quasi rents, rates of return, and the skill distribution of the native labor force. Quantity-quality trade-offs are considered for both immigrant and native workers. Medium- and long-run labor-supply responses by natives to immigrant-induced changes in wage rates are shown to have second-order effects which substantively affect the impacts of immigrants. The impact of immigration policy depends on the quality as well as quantity of immigrants, the time horizon, and the speed of factor market adjustment.