Showing papers on "Human capital published in 2017"

Long-term economic growth projections in the Shared Socioeconomic Pathways

Abstract: Long-term economic scenarios (up to 2100) are needed as a basis to explore possible different futures for major environmental challenges, including climate change. Given the high level of uncertainty involved, such scenarios would need to span a wide range of possible growth trajectories. The recently developed storylines of the Shared Socioeconomic Pathways (SSPs) provide a basis for making such projections. This paper describes a consistent methodology to derive (per capita) GDP trend pathways on a country basis. The methodology is based on a convergence process and places emphasis on the key drivers of economic growth in the long run: population, total factor productivity, physical capital, employment and human capital, and energy and fossil fuel resources (specifically oil and gas). The paper uses this methodology to derive country-level economic growth projections for 184 countries. The paper also investigates the influence of short-term growth rate estimates on the long-term income levels in various countries. It does so by comparing long-term projections based on short-term forecasts from 2011 with the projections based on forecasts from 2013. This highlights the effects of the recent economic crisis and uncertainty in short term developments on longer term growth trends. The projections are subject to large uncertainties, particularly for the later decades, and disregard a wide range of country-specific drivers of economic growth that are outside the narrow economic framework, such as external shocks, governance barriers and feedbacks from environmental damage. Hence, they should be interpreted with sufficient care and not be treated as predictions.

Childhood Circumstances and Adult Outcomes: Act Ii

Abstract: That prenatal events can have life-long consequences is now well established. Nevertheless, research on the Fetal Origins Hypothesis is flourishing and has expanded to include the early childhood (postnatal) environment. Why does this literature have a “second act?” We summarize the major themes and contributions driving the empirical literature since our 2011 reviews, and try to interpret the literature in light of an overarching conceptual framework about how human capital is produced early in life. One major finding is that relatively mild shocks in early life can have substantial negative impacts, but that the effects are often heterogeneous reflecting differences in child endowments, budget constraints, and production technologies. Moreover, shocks, investments, and interventions can interact in complex ways that are only beginning to be understood. Many advances in our knowledge are due to increasing accessibility of comprehensive administrative data that allow events in early life to be linked to long-term outcomes. Yet, we still know relatively little about the interval between, and thus about whether it would be feasible to identify and intervene with affected individuals at some point between early life and adulthood. We do know enough, however, to be able to identify some interventions that hold promise for improving child outcomes in early life and throughout the life course.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

World Development Report 2018 : Learning to Realize Education's Promise

Abstract: Korea understood that education was the best way to pull itself out of economic misery, so it focused on overhauling schools and committed itself to educating every child, and educating them well. Coupled with smart, innovative government policies and a vibrant private sector, the focus on education paid off. Today, not only has Korea achieved universal literacy, but its students also perform at the highest levels in international learning assessments. It’s a high-income country and a model of successful economic development. Korea is a particularly striking example, but we can see the salutary effects of education in many countries. Delivered well, education, and the human capital it creates, has many benefits for economies, and for societies. For individuals, education promotes employment, earnings, and health. It raises pride and opens new horizons. For societies, it drives long-term economic growth, reduces poverty, spurs innovation, strengthens institutions, and fosters social cohesion. In short, education powerfully advances the World Bank Group’s twin strategic goals: ending extreme poverty and boosting shared prosperity. Given that today’s students will be tomorrow’s citizens, leaders, workers, and parents, a good education is an investment with enduring benefits. But providing education is not enough. What is important, and what generates a real return on investment, is learning and acquiring skills. This is what truly builds human capital. As this year’s, World Development Report documents, in many countries and communities learning isn’t happening. Schooling without learning is a terrible waste of precious resources and of human potential. Worse, it is an injustice. Without learning, students will be locked into lives of poverty and exclusion, and the children whom societies fail the most are those most in need of a good education to succeed in life. Learning conditions are almost always much worse for the disadvantaged, and so are learning outcomes. Moreover, far too many children still aren’t even attending school. This is a moral and economic crisis that must be addressed immediately. This year’s Report provides a path to address this economic and moral failure. The detailed analysis in this Report shows that these problems are driven not only by service delivery failings in schools but also by deeper systemic problems. The human capital lost because of these shortcomings threatens development and jeopardizes the future of peopleand their societies. At the same time, rapid technological change raises the stakes: to compete in the economy of the future, workers need strong basic skills and foundations for adaptability, creativity, and lifelong learning.

The career costs of children

Abstract: This paper analyzes the life-cycle career costs associated with child rearing and decomposes their eects into unearned wages (as women drop out of the labor market), loss of human capital, and selection into more child-friendly occupations. We estimate a dynamic life-cycle model of fertility, occupational choice, and labor supply using detailed survey and administrative data for Germany for numerous birth cohorts across dierent regions. We use this model to analyze both the male-female wage gap as it evolves from labor market entry onward and the eect of pro-fertility policies. We show that a substantial portion of the gender wage gap is explainable by realized and expected fertility and that the long-run eect of policies encouraging fertility are considerably lower than the short-run eects typically estimated in the literature.

Strategic human resource management, human capital and competitive advantage: is the field going in circles?

Abstract: The resource-based view (RBV) of the firm has been consistently used as a backdrop in strategic human resource management (SHRM) research and has the potential to bridge the ‘micro–macro’ divide. The tension between the SHRM and the strategic human capital literature, however, signifies that RBV has not reached its potential. In this paper, we begin with a brief review of the conceptual logic linking human resource management (HRM) practices and firm outcomes that aim at highlighting the different treatment of RBV in the SHRM and strategic human capital literatures. We then propose a conceptual model that suggests that HRM practices are not simple levers that enable firms to create sustainable competitive advantage, as most of the strategic human capital research postulates. On the contrary, we argue that HRM practices can contribute to a firm's sustainable competitive advantage not only by enhancing employees' ability, and offering motivation and opportunities, but also by shaping supply-side and demand-side mobility constraints.

Forms of graduate capital and their relationship to graduate employability

Abstract: Purpose In the context of far-reaching changes in higher education and the labour market, there has been extensive discussion on what constitutes graduate employability and what shapes graduates’ labour market outcomes. Many of these discussions are based on skills-centred approaches and related supply-side logic. The purpose of this paper is to develop an alternative, relational conceptualisation of employability based on the concept of capitals. It discusses how this provides a more detailed and multi-dimensional account of the resources graduates draw upon when transitioning to the labour market. Design/methodology/approach The paper presents a new model on graduate employability, linked to five areas of capital which are seen as constitutive of graduates’ employability and significant to their transitions to the labour market. The paper draws together existing conceptual approaches and research studies to illustrate the different features of the model and how they relate to graduate employability. It also discusses some practical implications for those helping to facilitate graduates’ transitions to the job market. Findings The paper argues that the graduate capital model presents a new way of understanding graduate employability which addresses the challenges of facilitating graduates’ transitions and early career management. The forms of capital outlined are conceived as key resources that confer benefits and advantages onto individuals. These resources encompass a range of human, social, cultural, identity and psycho-social dimensions and are acquired through graduates’ formal and informal experiences. Research limitations/implications Whilst this is a conceptual model, it has potentially strong implications for future research in this area in terms of further research exploration on the core components and their application in the labour market. Practical implications This re-conceptualization of graduate employability has significant implication for graduates’ career management and strategising in developing resources for enhancing their transitions to and progression within the labour market. It also has implications for career educators in developing practical employability strategies that can be used within institutional settings. Social implications The paper raises salient implications for the effective and equitable management of graduate outcomes post-graduation which has clear relevance for all stakeholders in graduate employability, including students/graduates, career educators and employers. Originality/value The paper develops a new model for conceptualising graduate employability and illustrates and applies this to discussion of graduate employability. It also raises practical applications around the different components of the model.

The Human Capital Hoax: Work, Debt and Insecurity in the Era of Uberization:

Abstract: Human capital theory – developed by neoclassical economists like Gary Becker and Theodore Schultz – is widely considered a useful way to explain how employees might enhance their value in organizat...

The “sharing” economy: labor, inequality, and social connection on for-profit platforms

Abstract: For social analysts, what has come to be called the “sharing economy” raises important questions. After a discussion of history and definitions, we focus on 3 areas of research in the for-profit segment, also called the platform economy: social connection, conditions for laborers, and inequalities. Although we find that some parts of the platform economy, particularly Airbnb, do foster social connection, there are also ways in which even shared hospitality is becoming more like conventional exchange. With respect to labor conditions, we find they vary across platforms and the degree to which workers are dependent on the platform to meet their basic needs. On inequality, there is mounting evidence that platforms are facilitating person-to-person discrimination by race. In addition, platforms are advantaging those who already have human capital or physical assets, in contrast to claims that they provide widespread opportunity or even advantage less privileged individuals.

Income projections for climate change research: A framework based on human capital dynamics

Abstract: The quantitative assessment of the global effects of climate change requires the construction of income projections spanning large time horizons. Exploiting the robust link between educational attainment, age structure dynamics and economic growth, we use population projections by age, sex and educational attainment to obtain income per capita paths to the year 2100 for 144 countries. Such a framework offers a powerful, consistent methodology which can be used to study the future environmental challenges and to address potential policy reactions.

Life Cycle Wage Growth across Countries

Abstract: This paper documents how life cycle wage growth varies across countries. We harmonize repeated cross-sectional surveys from a set of countries of all income levels and then measure how wages rise with potential experience. Our main finding is that experience-wage profiles are on average twice as steep in rich countries as in poor countries. In addition, more educated workers have steeper profiles than the less educated; this accounts for around one-third of cross-country differences in aggregate profiles. Our findings are consistent with theories in which workers in poor countries accumulate less human capital or face greater search frictions over the life cycle.

Drought of Opportunities: Contemporaneous and Long-Term Impacts of Rainfall Shocks on Human Capital

Abstract: Higher wages are generally thought to increase human capital production, particularly in the developing world. We introduce a simple model of human capital production in which investments and time allocation differ by age. Using data on test scores and schooling from rural India, we show that higher wages increase human capital investment in early life (in utero to age 2) but decrease human capital from age 5 to 16. Children switch out of school into productive work when rainfall is higher. The opportunity cost of schooling, even for fairly young children, is an important factor in determining overall human capital investment.

Human Capital and China's Future Growth

Abstract: In this paper, we consider the sources and prospects for economic growth in China with a focus on human capital. First, we provide an overview of the role that labor has played in China's economic success. We then describe China's hukou policy, which divides China's labor force into two distinct segments, one composed of rural workers and the other of urban workers. For the rural labor force, we focus on the challenges of raising human capital by both increasing basic educational attainment rates as well as the quality of education. For the urban labor force, we focus on the issues of further expanding enrollment in college education as well as improving the quality of college education. We use a regression model to show the typical relationship between human capital and output in economies around the world and demonstrate how that relationship has evolved since 1980. We show that China has made substantial strides both in the education level of its population and in the way that education is being rewarded in its labor markets. However, as we look ahead, our results imply that China may find it impossible to maintain what appears to be its desired growth rate of 7 per cent in the next 20 years; a growth rate of 3 per cent over the next two decades seems more plausible. Finally, we present policy recommendations, which are rooted in the belief that China continues to have substantial room to improve the human capital of its labor force.

Does intellectual capital allow improving innovation performance? A quantitative analysis in the SME context

Abstract: Purpose The purpose of this paper is to investigate the association between the strength of intellectual capital (IC) and small- and medium-sized enterprise (SME) innovation performance. Design/methodology/approach Primary data of 150 SMEs belonging to manufacturing medium-high tech industries were collected through a survey. The methodology consists of a confirmatory factor analysis and a cluster analysis, complemented by a t-test, to assess whether there is a significant difference in terms of innovation performance of SMEs characterized by a different strength of IC. Findings Overall, the findings show that SMEs of the sample can be divided into two groups characterized by a different strength of IC, and those SMEs disclosing a higher strength of IC, in terms of human capital, innovation capital and relational capital, exhibit a significantly higher radical and incremental innovation performance. Practical implications The present study provides SME entrepreneurs and managers with an empirical evidence that possessing strong IC in its three dimensions seems to help SMEs reinforce their ability to generate both radical and incremental innovation. This calls that SME entrepreneurs and managers need to identify and effectively manage IC in order to strengthen and effectively leverage their investments on IC. Originality/value This study is particularly relevant because, instead of focusing on single categories of IC as previous studies mainly do, it adopts an overarching perspective of the dimensions of IC and their impact on both radical and incremental innovation performance. Moreover, it focuses on the SME context which has been less investigated than large firms within the domain of IC.

A European empirical study of the relationship between firms’ intellectual capital, financial performance and market value

Abstract: Purpose The purpose of this paper is to analyze the relationship between firms’ intellectual capital (IC), financial performance (FP) and market value (MV) as well as the relationship between ownership concentrations on IC performance. Design/methodology/approach A large sample of non-financial listed firms belonging to 14 countries in Western Europe, for the period between 2004 and 2015, was investigated using the GMM system (1998) dynamic estimator and the effect of lagged explanatory variables on firm’s FP and MV. Findings The results reveal that IC is an important resource for firms’ value creation. Human capital is found to be a key factor of firms’ wealth. Results show that capital employed efficiency positively impacts on firms’ FP in the short run. The impact of IC components on firms’ MV may not be immediate. The structural capital positively affects firms’ FP in the long run. Also, the results reveal that ownership concentration and owners’ management involvement constrain firms’ IC performance. Originality/value The current study contributes to IC research by exploring a large sample of firms across countries in Western Europe using econometric modeling. Considering that the effect of IC on firms’ FP needs time to be realized, thus to be measured, the effect of lagged explanatory variables on performance was tested, using dynamic panel estimators, specifically the GMM system (1998) dynamic estimator.

Impact of intellectual capital on corporate performance: evidence from the Arab region

Abstract: Purpose The purpose of this paper is twofold: first, to fill a gap in the intellectual capital (IC) literature by providing insights into the relationship between IC and corporate performance among Arab companies and second, to challenge the validity of the Value Added Intellectual Coefficient (VAIC) as a measure of IC’s contribution to performance. Design/methodology/approach The research sample included 100 publicly traded Arab companies selected by Forbes Middle East and ranked as top performers in terms of sales, profits, assets, and market value. The methodology included assessing the impact of IC components on company earnings, profitability, efficiency, and market performance for the period between 2011 and 2015. Research hypotheses were tested through the presentation of descriptive statistics, normality tests, correlation matrix, and multiple regression models. Findings The research yielded ambiguous results. Earnings and profitability were significantly affected by structural and physical capital; efficiency was determined primarily by physical capital; and market performance was mainly influenced by human capital. Research limitations/implications The main limitation of the research comes from disadvantages of VAIC as the measure of IC’s contributions to performance. Originality/value The paper fills a void in the study of IC and corporate performance among Arab companies.

Intellectual capital, absorptive capacity and product innovation

Abstract: Purpose The purpose of this paper is to study the influence of intellectual capital on a firm’s absorptive capacity (ACAP), and of ACAP on product innovation. The authors argue that intellectual capital and other sets of intangible assets are mobilized by firms through dynamic capabilities such as ACAP. Product innovation is one of the results of this process. Design/methodology/approach A quantitative study was conducted, including 500 firms of different sizes, industries and technological intensities located in southern Brazil. The validity of constructs and the theoretical model were confirmed by structural equation modeling. Findings The authors found that intellectual capital does influence ACAP, albeit differently on each of ACAP’s dimensions. Acquisition, assimilation and exploitation of knowledge are more decisively influenced by structural capital, followed by human capital. The ability of transformation of knowledge is evenly influenced by structural and human capital, and more moderately so by social capital. The results also showed that ACAP influences product innovation, but each of its dimensions demonstrated a different impact. Practical implications This study helps practitioners to identify the development of a firm’s intangible resources and its influences on product innovation. This characterization can serve as a benchmark for managers or private and public companies to define strategies and policies to stimulate innovation. Originality/value Few studies present a theoretical discussion about the relationship between a firm’s resources and ACAP’s dimensions in broad empirical contexts or in emerging countries.

Partner Choice, Investment in Children, and the Marital College Premium†

Abstract: We construct a model of household decision-making in which agents consume a private and a public good, interpreted as children's welfare. Children's utility depends on their human capital,...

On the Joint Evolution of Culture and Institutions

Abstract: Explanations of economic growth and prosperity commonly identify a unique causal effect, e.g., institutions, culture, human capital, geography. In this paper we provide instead a theoretical modeling of the interaction between culture and institutions and their effects on economic activity. We characterize conditions on the socio-economic environment such that culture and institutions complement (resp. substitute) each other, giving rise to a multiplier effect which amplifies (resp. dampens) their combined ability to spur economic activity. We show how the joint dynamics of culture and institutions may display interesting non-ergodic behavior, hysteresis, oscillations, and comparative dynamics. Finally, in specific example societies, we study how culture and institutions interact to determine the sustainability of extractive societies as well as the formation of civic capital and of legal systems protecting property rights.