Showing papers on "Human capital published in 2006"

Psychological Capital: Developing the Human Competitive Edge

Abstract: Although there are as many answers to the question of how organizations can gain competitive advantage in today's global economy as there are books and experts, one lesson seems very clear: traditional answers and resources are no longer sufficient. This seminal book offers not only an answer regarding how to gain competitive advantage through people, but also a brand new, untapped human resource-psychological capital, or simply PsyCap. Generated from both the positive psychology movement and the authors' pioneering work on positive organizational behavior, PsyCap goes beyond traditionally recognized human and social capital. But PsyCap is not a vague or unscientific concept: to be included in PsyCap, a given positive construct must be based on theory, research, and valid measurement, must be open to development, and must have measurable performance impact. The positive constructs that have been determined to best meet these PsyCap criteria, efficacy (confidence), hope, optimism, and resiliency, are covered in separate chapters in Psychological Capital. After exploring other potential positive constructs such as creativity, wisdom, well being, flow, humor, gratitude, forgiveness, emotional intelligence, spirituality, authenticity, and courage, the authors summarize the research demonstrating the performance impact of PsyCap. They go on to provide the PsyCap Questionnaire (PCQ) as a measurement tool, and the PsyCap Intervention (PCI) as a development aid. Utility analysis indicates that investing in the development of PsyCap as presented in this book can result in a very substantial return. In total, Psychological Capital provides theory, research, measurements, and methods of application for the new resource of psychological capital, a resource that can be developed and sustained for competitive advantage.

Bureaucracy and Growth: A Cross-National Analysis of the Effects of "Weberian" State Structures on Economic Growth

Abstract: Since Weber’s classical works, that were published more than a hundred years ago, sociologist still pay a lot of attention to the investigation of role of bureaucratic authorities in the development of economic growth. Basing on new original data we analyzed the characteristics of leading state economic structures in 35 developing countries in the period of 1970-1990 as well as the growth rates in these countries. We suggest the Weberianness scale which has a simple way of estimating of the meritocratic hiring of the employees and predictable long-term waged career growth. We find out that these Weber indicators considerably increase the likelihood of economic development even though we control the GDP per capita and the amount of human capital. Our results prove that Weberianness should be included in the models of economic development as one of the main factors. Moreover the politicians should more focus on establishing qualitative bureaucratic structures while sociologists should pay more attention to the studies of state bureaucracies differences.

Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital

Abstract: From 1940 to 1990, a 10% increase in a metropolitan area's concentration of college-educated residents was associated with a 0.8% increase in subsequent employment growth. Instrumental variables esti- mates support a causal relationship between college graduates and em- ployment growth, but show no evidence of an effect of high school graduates. Using data on growth in wages, rents, and house values, I calibrate a neoclassical city growth model and find that roughly 60% of the employment growth effect of college graduates is due to enhanced productivity growth, the rest being caused by growth in the quality of life. This finding contrasts with the common argument that human capital generates employment growth in urban areas solely through changes in productivity.

An Empirical Examination of the Mechanisms Mediating between High-Performance Work Systems and the Performance of Japanese Organizations

Abstract: The resource-based view of the firm and social exchange perspectives are invoked to hypothesize linkages among high-performance work systems, collective human capital, the degree of social exchange in an establishment, and establishment performance. The authors argue that high-performance work systems generate a high level of collective human capital and encourage a high degree of social exchange within an organization, and that these are positively related to the organization's overall performance. On the basis of a sample of Japanese establishments, the results provide support for the existence of these mediating mechanisms through which high-performance work systems affect overall establishment performance.

The Importance of Resources in the Internationalization of Professional Service Firms: The Good, the Bad, and The Ugly

Abstract: To further knowledge about the bases of internationalization, we examined the importance of two firm resources: human capital, and relational capital derived from relations with corporate clients a...

Access (Not) Denied: The Impact of Financial, Human, and Cultural Capital on Entrepreneurial Entryin the United States

Abstract: Entrepreneurship contributes to business dynamics in all economies, and the individual benefits of starting a business are clear. Nonetheless, access to business start-ups may not be available to all people because of resource constraints. Using a unique new data set for the United States, we examine the relative importance of three forms of resources in pursuing start-up ventures: financial, human, and cultural capital. Our analysis of the Panel Study of Entrepreneurial Dynamics shows that neither financial nor cultural capital resources are necessary conditions for entrepreneurial entry. By contrast, potential entrepreneurs gain significant advantages if they possess high levels of human capital. Specifically, advanced education and managerial experience are significantly positively associated with entrepreneurial entry. Our findings suggest that attempts at entering entrepreneurship, at least in the short-term, may be increasing, as opportunities to acquire human capital are becoming more widespread.

Are Leaders Portable

Abstract: Does management talent transfer from one company to another? The market certainly seems to think so. Stock prices spike when companies announce new CEOs from a talent generator like General Electric. But how do these executives perform over the long term? The authors studied the careers of 20 former GE executives who went on to lead other major organizations, with strikingly uneven results. Even the best management talent, the authors found, is transferable only if it maps to the challenges of the new environment. More specifically, the authors identified five types of skills that may or may not transfer to a new job: general management human capital, or the skills to gather, cultivate, and deploy financial, technical, and human resources; strategic human capital, or individuals' expertise in cost cutting, growth, or cyclical markets; industry human capital, meaning the technical and regulatory knowledge unique to an industry; relationship human capital, or the extent to which a manager's effectiveness can be attributed to his or her experience working with colleagues or as part of a team; and company-specific human capital, or the knowledge about routines and procedures, corporate culture and informal structures, and systems and processes that are unique to a company. The GE executives' performance as CEOs depended on whether their new organizations were able to leverage each type of skill. The authors'findings challenge the conventional wisdom on human capital, which holds that there are two types of skill: general management, which is readily transferable, and company specific, which is not. In fact, they argue, other types of management capabilities can make a significant contribution to performance, and company-specific skills can be an asset in a new job.

Social Capital and Organizational Performance: Evidence from Urban Public Schools

Abstract: In this paper we examine social capital and its relationship with performance at the organizational level. We predict that both internal and external social capital will have a positive effect on organizational performance. We test our hypotheses in 88 urban public schools where we collected data from principals, teachers, parents, and students. Results indicate that both internal social capital (relations among teachers) and external social capital (relations between the principal and external stakeholders) predict student achievement in mathematics and reading. These effects were sustained over time for reading achievement, providing support for a causal relationship between social capital and performance. We provide evidence that social capitals impact on student achievement in mathbut not readingis mediated by the quality of instruction provided by teachers. These results underscore the importance of context in studies of social capital.

The Us Gender Pay Gap in the 1990s: Slowing Convergence

Abstract: Using Michigan Panel Study of Income Dynamics (PSID) data, we study the slowdown in the convergence of female and male wages in the 1990s compared to the 1980s. We find that changes in human capital did not contribute to the slowdown, since women's relative human capital improved comparably in the two decades. Occupational upgrading and deunionization had a larger positive effect on women's relative wages in the 1980s, explaining a portion of the slower 1990s convergence. However, the largest factor was that the "unexplained" gender wage gap fell much faster in the 1980s than the 1990s. Our evidence suggests that changes in labor force selectivity, changes in gender differences in unmeasured characteristics and in labor market discrimination, as well as changes in the favorableness of demand shifts each may have contributed to the slowing convergence of the unexplained gender pay gap.

Natural Resources and Economic Growth: The Role of Investment

Abstract: This paper begins by a brief review of empirical evidence that seems to indicate that economic growth since 1965 has varied inversely with natural resource abundance or intensity across countries. The paper then proposes a new linkage between natural resources and economic growth, through saving and investment. When the share of output that accrues to the owners of natural resources rises, the demand for capital falls and this leads to lower real interest rates and less rapid growth. Moreover, the analysis shows that the discrepancy between the privately and socially optimal rates of growth increases with the natural capital share. Empirical evidence from 85 countries from 1965 to 1998 suggests that natural capital may on average crowd out physical as well as human capital, thereby inhibiting economic growth. The results also suggest that, across countries, heavy dependence on natural resources may hurt saving and investment indirectly by slowing down the development of the financial system.

Absorptive Capacity and Innovative Performance: A Human Capital Approach

Abstract: This study investigates the importance of human capital on the firms’ absorptive capacity, in relation to firms’ innovative performance. The estimation of an ordered probit model including 1544 firms from the manufacturing and service industry in Denmark shows that the share of highly educated employees, application of human resource management practices within the firm and development of a closer relationship with both vertically related actors and knowledge institutions are not only positively correlated with the ability to innovate but also negatively correlated with the degree of innovative imitation. Finally, work experience among managers, heads of departments and employees at the managerial level is negatively associated with the ability to innovate for science-based and ICT-intensive firms, thus indicating the importance of updating the skills of the employees in these high-tech sectors.

Three models of education Rights, capabilities and human capital

Abstract: This article analyses three normative accounts that can underlie educational policies, with special attention to gender issues. These three models of education are human capital theory, rights disc...

The U.S. Gender Pay Gap in the 1990S: Slowing Convergence

Abstract: Using Michigan Panel Study of Income Dynamics (PSID) data, the authors study the slowdown in the convergence of female and male wages in the 1990s compared to the 1980s. They find that changes in human capital did not contribute to the slowdown, since women's relative human capital improved comparably in the two decades. Occupational upgrading and deunionization had a larger positive effect on women's relative wages in the 1980s than in the 1990s, explaining part of the slower 1990s convergence. However, the largest factor was a much faster reduction of the “unexplained” gender wage gap in the 1980s than in the 1990s. The evidence suggests that changes in labor force selectivity, changes in gender differences in unmeasured characteristics and in labor market discrimination, and changes in the favorableness of demand shifts each may have contributed to the slowing convergence of the unexplained gender pay gap.

Das Human-Kapital: A Theory of the Demise of the Class Structure

Abstract: This paper suggests that the demise of the capitalists–workers class structure was a socio-economic transformation orchestrated by the capitalists in reaction to the increasing importance of human capital in sustaining their profit rates. Physical capital accumulation in the process of industrialization enhanced the importance of human capital in production and generated incentives for capitalists to support the provision of public education for the masses, triggering the demise of the existing class structure. The implications of the theory are consistent with the voting patterns on England’s education reform of 1902.

Entrepreneurship, Geography, and American Economic Growth

Abstract: 1. Introduction 2. Entrepreneurship and economic growth 3. Regional variation in entrepreneurial activity 4. Human capital and entrepreneurship 5. Entrepreneurship and employment growth 6. Summary and conclusions 7. A formulation of entrepreneurship policy.

Potential Added Value of Psychological Capital in Predicting Work Attitudes

Abstract: Meeting the challenge of effectively managing human resources requires new thinking and approaches. To extend the traditional perspective of economic capital, increasing recognition is being given ...

Predicting Perceived Employability: Human Capital or Labour Market Opportunities?

Abstract: Employability is believed to be a crucial concept concerning employees’ job security. This study investigates whether factors associated with human capital and the dual labour market predict percei ...

The Experience of Conditional Cash Transfers in Latin America and the Caribbean

Abstract: This article discusses the experience of six conditional cash transfer programmes in Latin America, a model of social safety-nets which has grown to dominate the social protection sector in the region during the past decade. While they have been generally successful in terms of achieving their core objective, it is still not clear whether these programmes constitute the most cost-efficient or sustainable solution to the development bottleneck they seek to address. Furthermore, the almost exclusive focus on the human capital accumulation of children leads to missed opportunties in terms of impact on household welfare and the broader rural development context.

The Long-Term Effects of Youth Unemployment

Abstract: Using NLSY data, we examine the long-term effects of youth unemployment on later labor market outcomes. Involuntary unemployment may yield suboptimal investments in human capital in the short run. A theoretical model of dynamic human capital investment predicts a rational "catch-up" response. Using semiparametric techniques to control for the endogeneity of prior behavior, our estimates provide strong evidence of this response. We also find evidence of persistence in unemployment. Combining our semiparametric estimates with a dynamic approximation to the lifecycle, we find that unemployment experienced as long ago as ten years continues to affect earnings adversely despite the catch-up response.

Diaspora networks and the international migration of skills : how countries can draw on their talent abroad

Abstract: Network diasporas serve as bridge institutions connecting developing economy insiders, with their risk-mitigating knowledge and connections, to outsiders in command of technical know-how and investment capital. This book examines the interaction of developing-country expatriate talent with institutions in expatriates' countries of origin in an attempt to make the development potential of diasporas and their knowledge a reality.

Initial Labor Market Conditions and Long-Term Outcomes for Economists

Abstract: Each year, graduate students entering the academic job market worry that they will suffer due to uncontrollable macroeconomic risk. Given the importance of general human capital and the relative ease of publicly observing productivity in academia, one might expect that long-term labor market outcomes for students graduating in unfavorable climates will resemble long-term outcomes for those graduating in favorable climates. In this paper, I analyze the relationship between macroeconomic conditions at graduation, initial job placement, and long-term outcomes for Ph.D. economists from seven programs. Using macroeconomic conditions as an instrument for initial placement, I show that a quality and type of initial job have a causal effect on long-term job characteristics. I also show that better initial placement increases research productivity, which helps to limit the set of economic models that can explain the effect of initial placement on long-term jobs.

The “Mincer Equation” Thirty Years After Schooling, Experience, and Earnings

Abstract: This paper evaluates the empirical performance of the standard Mincer earnings equation thirty years after the publication of Schooling, Experience and Earnings. Over this period, there has been a dramatic expansion in micro data and estimation techniques available to labor economists. How does the Mincer equation stand in light of these advances in empirical labor economics? Is it time to revise our benchmark model? On the basis of the existing literature and some new empirical estimates, I conclude that the Mincer equation remains an accurate benchmark for estimating wage determination equations provided that it is adjusted by (1) including a quartic function in potential experience instead of just a quadratic, (2) allowing for a quadratic term in years of schooling to capture the growing convexity in the relationship between schooling and wages, and (3) allowing for cohort effects to capture the dramatic growth in returns to schooling among cohorts born after 1950.

Institutions and the Impact of Investment on Growth

Abstract: Three major theories have emerged as explanatory factors underlying crosscountry differences in income levels and growth rates. First, the neoclassical theory of economic growth, based on Solow (1956) and extended by Lucas (1988), Romer (1986, 1990), and others, focuses on the inputs of physical and human capital into the production process, and on technological advances, as the determinants of economic performance. Second, the geographic/locational theory (Sachs 2001, Gallup, Sachs and Mellinger 1998 and Diamond 1997) argues that a temperate climate and ease of access to markets are critically important for the achievement of high income levels and growth rates. In contrast, tropical climatic conditions both erode the energy level of workers and increase the risk of disabling and life-threatening diseases such as malaria. As a result, worker productivity and the general level of development are retarded in tropical areas. Third, the institutional approach stresses the importance of creating an institutional environment that is generally supportive of markets (e.g., protection of property rights, enforcement of contracts, and voluntary exchange at market-determined prices). The writings of Scully (1988, 1992), North (1990), Barro (1996), Landes (1998), Knack (1996, 2003), Hall and Jones (1999) and Acemoglu, Johnson and Robinson (2001) reflect the institutional perspective. These three explanations for growth are not logically inconsistent with each other, so all might play a role. This paper focuses on the relationship between institutions and investment, and analyzes how institutional quality influences growth through its impact on both the level and productivity of investment. The premise that a solid institutional framework is necessary for investment is well-established. Investors will be reluctant to risk their capital when property rights are weak and poorly protected, and as a result, they fear that their returns may be appropriated by others. Moreover, institutions also lay the foundation for

Labor supply, school attendance, and remittances from international migration : the case of El Salvador

Abstract: The objective of this paper is to present microeconomic evidence on the economic effects of international remittances on households' spending decisions. Remittances can increase the household budget and reduce liquidity constraint problems, allowing more consumption and investment. In particular, remittances can afford investing in children's human capital, a key outcome for the discussion of the perspective of growth in a high recipient developing country. Robust estimates that take into account both selection and endogeneity problems in estimating an average impact of remittances are substantially different from least squares (OLS) estimates presented in previous studies, indicating the importance of dealing with these methodological concerns. After controlling for household wealth and using selection correction techniques such as propensity score matching as well as village and household networks as instruments for remittances receipts, average estimates suggest that girls and young boys (less than 14 years old) from recipient households seem to be more likely to be enrolled at school than those from nonrecipient households. Remittances are also negatively related to child labor and adult female labor supply, while adult male labor force participation remains unaffected on average. The results signaling that the additional income derived from migration increases girls' education and reduces women's labor supply, with no major impact on activity choice for males 14 years or older, suggest the presence of gender differences in the use of remittances across (and possibly, within) households.

The knowledge economy, the KAM methodology and World Bank operations

Abstract: This paper highlights the importance of knowledge for long-term economic growth. It presents the concept of the knowledge economy, an economy where knowledge is the main engine of economic growth. The paper also introduces the knowledge economy framework, which asserts that sustained investments in education, innovation, information and communication technologies, and a conducive economic and institutional environment will lead to increases in the use and creation of knowledge in economic production, and consequently result in sustained economic growth. In order to facilitate countries trying to make the transition to the knowledge economy, the Knowledge Assessment Methodology (KAM) was developed. It is designed to provide a basic assessment of countries' readiness for the knowledge economy, and identifies sectors or specific areas where policymakers may need to focus more attention or future investments. The KAM is currently being widely used both internally and externally to the World Bank, and frequently facilitates engagements and policy discussions with government officials from client countries.

Making It in America: High School Completion by Immigrant and Native Youth

Abstract: Using data from the National Longitudinal Study of Adolescent Health (Add Health), we find that first-generation youth of Hispanic, Asian, and African heritage obtain more education than their parents, but the second generation and third or higher generations lose ground. Differences in dropout rates by race-ethnicity and immigrant generation are driven by differences in human, cultural, and social capital. Low levels of family human capital, school social capital, and community social capital place the children of immigrants at risk of dropping out. However, cultural capital and immigrant optimism buffer first-generation Hispanic youth and the children of Asian immigrants from the risk of dropping out of high school. While human and social capital resources improve with immigrant generation, cultural capital diminishes.

Human capital and entrepreneurial success: a meta-analytical review

Abstract: The study meta-analytically integrates results from three decades of human capital research in entrepreneurship. Based on 70 independent samples (N = 24,733), we found a significant but small relationship between human capital and success (rc = .098). We examined theoretically derived moderators of this relationship referring to conceptualizations of human capital, to context, and to measurement of success. The relationship was higher for outcomes of human capital investments (knowledge/skills) than for human capital investments (education/experience), for human capital with high task-relatedness compared to low task-relatedness, for young businesses compared to old businesses, and for the dependent variable size compared to growth or profitability. Findings are relevant for practitioners (lenders, policy makers, educators) and for future research. Our findings show that future research should pursue moderator approaches to study the effects of human capital on success. Further, human capital is most important if it is task-related and if it consists of outcomes of human capital investments rather than human capital investments; this suggests that research should overcome a static view of human capital and should rather investigate the processes of learning, knowledge acquisition, and the transfer of knowledge to entrepreneurial tasks.

Progress Against Poverty: Sustaining Mexico's Progresa-Oportunidades Program

Abstract: In 1997, Mexico launched a new incentive-based poverty reduction program to enhance the human capital of those living in extreme poverty. This book presents a case study of Progresa-Oportunidades, focusing on the main factors that have contributed to the program's sustainability, policies that have allowed it to operate at the national level, and future challenges.

Higher education and economic growth in Africa

Abstract: This paper uses panel data over the 1960–2000 period, a modified neoclassical growth equation, and a dynamic panel estimator to investigate the effect of higher education human capital on economic growth in African countries. We find that all levels of education human capital, including higher education human capital, have positive and statistically significant effect on the growth rate of per capita income in African counties. Our result differs from those of earlier research that find no significant relationship between higher education human capital and income growth. We estimate the growth elasticity of higher education human capital to be about 0.09, an estimate that is twice as large as the growth impact of physical capital investment. While this is likely to be an overestimate of the growth impact of higher education, it is robust to different specifications and points to the need for African countries to effectively use higher education human capital in growth policies.