The Returns to Education: Macroeconomics

We offer an extensive summary and a critical discussion of the empirical literature on the impact of human capital on macro‐economic performance, with a particular focus on UK policy. We also highlight methodological issues and make recommendations for future research priorities.
Taking the studies as a whole, the evidence that human capital increases productivity is compelling, though still largely divided on whether the stock of education affects the long‐run level or growth rate of GDP. A one‐year increase in average education is found to raise the level of output per capita by between three and six percent according to augmented neo‐classical specifications, while leading to an over one percentage point faster growth according to estimates from the new‐growth theories. Still, over the short‐run planning horizon (four years) the empirical estimates of the change in GDP are of similar orders of magnitude in the two approaches. The impact of increases at different levels of education appear to depend on the level of a country's development, with tertiary education being the most important for growth in OECD countries. Education is found to yield additional indirect benefits to growth. More preliminary evidence seems to indicate that type, quality and efficiency of education matter for growth too.     

Does Education Matter for Economic Growth?

Empirical growth regressions typically include mean years of schooling as a proxy for human capital. However, empirical research often finds that the sign and significance of schooling depends on the sample of observations or the specification of the model. We use a non‐parametric local‐linear regression estimator and a non‐parametric variable relevance test to conduct a rigorous and systematic search for significance of mean years of schooling by examining five of the most comprehensive schooling databases. Contrary to a few recent articles that have identified significant nonlinearities between education and growth, our results suggest that mean years of schooling is not a statistically relevant variable in growth regressions. However, we do find evidence (within a cross‐sectional framework), that educational achievement, measured by mean test scores, may provide a more reliable measure of human capital than mean years of schooling.     

Humane Capital: A Reexamination of Catholic Social Teachings in Light of the Shift to Human Capital

Human capital is the set of productive knowledge, skills, and traits that individuals possess. Productive knowledge and skills are typically learned through education and work experience. Character traits matter both for the application of knowledge and skills and for their acquisition in the first place. In the past 100 years—and with enormous social consequences—the economy has transitioned to human capital being the most important resource for individual and social outcomes. Societies responded by emphasizing schooling as the means to develop this resource. In recent decades, however, researchers have discovered that human capital acquisition depends on certain character skills best developed early in life before schooling starts, typically within families. Current research and policy are investigating which combination of early life schooling and improvement in family circumstances can best help people acquire the character skills, and then human capital, needed to flourish. These changes have important implications for the social teachings of the Catholic Church, including moral insights into the distribution of resources, emphasis on the active subject in human work, and the role of civil society in promoting ideas and institutions conducive to an ideal human ecology.     

Age of Menarche,Adolescent Sexual Intercourse and Schooling Attainment of Women

We use data from the 1970 British Cohort Study to measure the effect of adolescent sexual intercourse on female schooling attainment. We emphasize the appropriate use of menarcheal age as an instrumental variable (IV) for early intercourse. Our analysis suggests that developmental trajectories vary with menarcheal age and, therefore, capturing variations in individual cognitive capacities induced by pubertal timing is crucial for the validity of the IV identification strategy. Our empirical results indicate that adolescent sexuality reduces full‐time education by approximately one year. Given that 37 percent of females in our data exited virginity in adolescence, the aggregate loss of human capital as measured by average years of female schooling could be up to one‐third of a year.     

人力资本的离散度、追赶效应与经济增长的关系——基于人力资本分布结构的异质性

本文结合人力资本平均存量的高低及我国人力资本分布结构的规律性,实证分析了我国人力资本离散度与经济增长的关系。结论表明,具有较高人力资本平均存量地区的人力资本离散度正向于经济增长,而具有较低人力资本平均存量地区负向于经济增长。依据高等教育拉动、正态分布和低等教育拉动三种类型,文章从人力资本的追赶效应出发,归纳了内生增长理论的趋同思想,并发现具有高等教育拉动型和正态分布型人力资本分布结构的地区与前沿人力资本存量地区有增长趋同性,而具有低等教育拉动型的地区与之具有增长发散性。     

中国行业层面研究与试验发展资本存量核算

研究目标：测算中国八大行业门类研究与试验发展（Research and Development,R&D）资本存量。研究方法：基于SNA2008的GDP核算框架,厘清R&D支出的资本化核算框架;再利用美国BEA方法测算R&D资本存量。研究发现：1990~2015年,中国R&D资本存量不到美国R&D资本存量的1/4;然而,自1994年后,中国R&D资本存量年均增长率达24.79%,而美国仅为4.86%,中美两国R&D资本存量差距呈逐渐缩小趋势;制造业R&D资本存量占全国R&D资本存量的比例呈上升趋势,从1990年的17.41%增长到2015年的68.08%,这与中国加快制造业转型升级的事实相符。研究创新：给出完整的R&D支出资本化核算过程,首次测算中国八大行业门类的R&D资本存量。研究价值：为分析技术进步对经济增长的影响提供了行业层面R&D投资和资本存量数据序列。     

Cost‐ and Income‐based Measures of Human Capital

Human capital is increasingly believed to play an important role in the growth process, however, adequately measuring its stock remains controversial. In this paper three general approaches to measurement are identified; cost‐based, income‐based and educational stock‐based. This survey focuses on the first two approaches and provides a critical review of the theories and their applications to data from a range of countries. Particular emphasis is placed upon the work of Jorgenson and Fraumeni (1989, 1992) and some new results for New Zealand based upon their approach are also presented.     

Labor-market exposure as a determinant of attitudes toward immigration

This paper re-examines the role of labor-market competition as a determinant of attitudes toward immigration. We claim two main contributions. First, we use more sophisticated measures of the degree of exposure to competition from immigrants than previously done. In addition to education, we focus on the protection derived from (self-assessed) investments in job-specific human capital and from specialization in occupations that are (objectively) intensive in communication tasks. Second, we explicitly account for the potential endogeneity arising from job search. Methodologically, we estimate by instrumental variables, an econometric model that allows for heterogeneity at the individual, regional and country level. Drawing on the 2004–2005 European Social Survey, we obtain the following main results. First, natives that dislike immigrants tend to work in low-immigration jobs, biasing OLS estimates. Second, working in jobs that require high levels of specific human capital leads to relatively more pro-immigration attitudes, although this effect is only found for respondents with more than 12 years of schooling. Third, the degree of manual (communicational) intensity of workers' occupations has a negative (positive) effect on their pro-immigration views. This effect is the most significant, both in a statistical and in a quantitative sense, and is distinct from the protection from immigrant competition provided by formal education. Overall our results suggest a large role for skill-based labor market competition in determining individual attitudes toward immigration.     

What Do You Know,Who Do You Know?: School as a Site for the Production of Social Capital and its Effects on Income Attainment in Poland and the Czech Republic

This paper criticizes traditional approaches to stratification, which suggest that education contributes to inequality solely by endowing people with different amounts of human capital (knowledge and skills) or credentials. What these approaches overlook is the social component of education—friends, acquaintances and other connections one accumulates while in school. These connections reduce the uncertainty inherently present in the hiring process by compensating for lack of information with trust. We argue that social capital gained while in school has an independent effect on individual income, and show how this effect varies by education and experience levels. Conceptualizing schooling as an important source of social capital and finding ways to disentangle the effects of human and social capital on individual income are a contribution that economic sociologists can make to the study of education and inequality.     

Stay in school or start working? — The human capital investment decision under uncertainty and irreversibility

At any moment a student may decide to leave school and enter the labor market, or to stay in the education system. The timing of their departure determines their level of academic achievement and formal qualification. Education is a multi-stage process of investing in an accumulative human capital stock. How long can I expect to go to school? How much will I invest in my education? To answer these questions we apply the real option approach. We depart from recent literature by (1) adding accumulated education costs and determining the expected time of market entry, (2) considering complete earnings profiles including entry-level wages, sheepskin effects and earning dynamics, and (3) discussing the option value of schooling while introducing potential career opportunities or threats of unemployment modeled as major uncertain events connected with particular formal education achievements.     

The effects of families and ability on men's education and earnings in Britain

The paper estimates the returns to education for a cohort of men born in Britain in March 1958 who have been followed since birth until the age of 33. The data used has a wealth of information on family background including parental education, social class and interest shown in the child's education as well as measures of ability. These variables are typically missing in studies looking at the returns to schooling. In the paper, we find that the average return to an additional year of full-time education for the UK men is somewhere around 5 1/2% to 6% even after correcting for the effects of measurement error. The paper also presents evidence that the returns to an additional year of schooling in the UK are heterogeneous. In particular, the paper finds some evidence that men with lower tastes for education, have significantly higher marginal returns to education. The results of the paper suggest that recent IV estimates of the returns to schooling in the UK, which exceed typical OLS estimates, may overestimate the average marginal return for the population of men as a whole.     

企业人力资本投资决策的静态均衡博弈分析

在职培训是企业最常用的人力资本投资方式,企业通过对员工提供培训,可以提升其人力资本存量,使企业经济效益得到提高。但是企业与企业、企业与员工之间存在人力资本投资的双重博弈。企业应采取投资成本共担、协议约束等措施,促进最优均衡组合解的实现,以获取人力资本投资的收益。     

An empirical approach to the organisational determinants of spin-off creation in European universities

Given the importance in recent years of the phenomenon of academic entrepreneurship in European universities, knowledge about determinants and performance of this technology transfer mechanism may have important managerial and policy implications. Applying the resource-based view at universities, we have tested the influence of five bundles of resources and capabilities on spin-off activity rates as well as on the performance of new spin-offs in a sample of seven European universities. These five bundles are: technology transfer policies and strategies; human capital; stock of technology; resources and capabilities of technology transfer offices; and support measures for academic entrepreneurship. Our results show that excellence of human capital and the presence of university-based financial support measures are strongly associated with both spin-off activity and performance. Another interesting finding is related to the availability of university-based non-economic support measures (training, counselling, etc.), which have no influence on spin-off activity but are significantly associated with performance of new spin-offs. We also discuss some interesting relationships between explanatory variables.     

Publication Bias in the Economic Freedom and Economic Growth Literature

Abstract.  The impact of institutions on economic performance has attracted significant attention from researchers, as well as from policy reformers. A rapidly growing area in this literature is the impact of economic freedom on economic growth. The aim of this paper was to explore publication bias in this literature by means of traditional funnel plots, meta‐significance testing, as well as by bootstrapping these meta‐significance tests. When all the available estimates are combined and averaged, there seems to be evidence of a genuine and positive economic freedom – economic growth effect. However, it is also shown that the economic freedom – economic growth literature is tainted strongly with publication bias. The existence of publication bias makes it difficult to identify the magnitude of the genuine effect of economic freedom on economic growth. The paper explores the differences between aggregate and disaggregate measures of economic freedom and shows that selection effects are stronger when aggregate measures are used.     

全要素生产率与人力资本--基于中国经验数据的实证研究（1979-2010）

本文旨在运用中国数据（1979-2010）检验全要素生产率与人力资本之间存在的经验关系,其研究价值在于首次以较完整数据来总结两者30年来的互动发展。首先运用Malmquist指数法和Cobb-Douglas生产函数推导法估算出该期间中国全要素生产率的贡献率,然后以社会平均教育年限及公共教育经费占GDP比重作为人力资本代表指标,运用计量方法进行实验检验。结果发现,社会教育年限的提高有助于全要素生产率的增加,公共教育经费规模也是影响全要素生产率的重要因素。     

Bayesian inference in a correlated random coefficients model: Modeling causal effect heterogeneity with an application to heterogeneous returns to schooling

We consider the problem of causal effect heterogeneity from a Bayesian point of view. This is accomplished by introducing a three-equation system, similar in spirit to the work of Heckman and Vytlacil (1998), describing the joint determination of a scalar outcome, an endogenous “treatment” variable, and an individual-specific causal return to that treatment. We describe a Bayesian posterior simulator for fitting this model which recovers far more than the average causal effect in the population, the object which has been the focus of most previous work. Parameter identification and generalized methods for flexibly modeling the outcome and return heterogeneity distributions are also discussed.Combining data sets from High School and Beyond (HSB) and the 1980 Census, we illustrate our methods in practice and investigate heterogeneity in returns to education. Our analysis decomposes the impact of key HSB covariates on log wages into three parts: a “direct” effect and two separate indirect effects through educational attainment and returns to education. Our results strongly suggest that the quantity of schooling attained is determined, at least in part, by the individual’s own return to education. Specifically, a one percentage point increase in the return to schooling parameter is associated with the receipt of (approximately) 0.14 more years of schooling. Furthermore, when we control for variation in returns to education across individuals, we find no difference in predicted schooling levels for men and women. However, women are predicted to attain approximately 1/4 of a year more schooling than men on average as a result of higher rates of return to investments in education.     

Beyond Publication Bias

Abstract.  This review considers several meta‐regression and graphical methods that can differentiate genuine empirical effect from publication bias. Publication selection exists when editors, reviewers, or researchers have a preference for statistically significant results. Because all areas of empirical research are susceptible to publication selection, any average or tally of significant/insignificant studies is likely to be biased and potentially misleading. Meta‐regression analysis can see through the murk of random sampling error and selected misspecification bias to identify the underlying statistical structures that characterize genuine empirical effect. Meta‐significance testing and precision‐effect testing (PET) are offered as a means to identify empirical effect beyond publication bias and are applied to four areas of empirical economics research – minimum wage effects, union‐productivity effects, price elasticities, and tests of the natural rate hypothesis.     

How leveraging human resource capital with its competitive distinctiveness enhances the performance of commercial and public organizations

Although scholars agree that complex relationships between organizations' actual human resources (i.e., human capital stock) and means of leveraging these resources may influence performance, little empirical work has tested such propositions directly. We collected two primary data sets from privateand public‐sector organizations in Israel. The multiplicative interaction between perceived human resources capital and distinctive value derived from that HR capital was significantly related to various measures of perceived and objective organizational performance. Having higher levels of human resources capital was strongly associated with performance only when top managers perceived that these resources provided distinctive value in terms of being highly valuable, inimitable, rare, and nonsubstitutable. We discuss the implications of these findings for research on strategic human resource management and the resource‐based view of competitive advantage, as well as for practical efforts to develop firm‐specific human resource capital that is inherently distinctive. © 2005 Wiley Periodicals, Inc.     

Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities

Based on recent theoretical developments the argument is made that the average level of human capital is a local public good. Cities with higher average levels of human capital should therefore have higher wages and higher land rents. After conditioning on the characteristics of individual workers and dwellings, this prediction is supported by data for Standard Metropolitan Statistical Areas (SMSAs) in the United States, where the SMSA average levels of formal education and work experience are used as proxies for the average level of human capital. The alternative explanations of omitted SMSA variables and self-selection are evaluated. An estimate of the effect of an additional year of average education on total factor productivity is computed.     

Differences in education and earnings across ethnic groups in Guatemala

Most of the research on ethnicity in Central America looks at two groups: indigenous and nonindigenous populations. While indigenous people are disadvantaged relative to the nonindigenous group, the many groups that make up the indigenous population are often times not very similar in terms of personal and group characteristics. But the differences within these groups are important for public policy. Ethnic groups' experience depends on many factors besides education and skill levels. These additional factors may include what has come to be known as “ethnic capital.” That is, the socioeconomic performance of today's workers depends not only on parental skills, but also on the average skills of the ethnic group in the parent's generation. In the United States, when data on ethnic groups is broken down, the black-white comparison may be too simple a characterization. It is argued here that the indigenous-nonindigenous comparison in Guatemala is too simple. Guatemala's household survey, which utilizes two questions to determine an individual's ethnicity (self-perception and language), is used here to examine the question of ethnicity in terms of schooling attainment, earnings and the returns to schooling. The following hypothesis is tested: do higher levels of schooling correspond to higher returns to schooling? Dividing the indigenous sample into the main ethnic groups produces widely different and dramatic results in terms of schooling, earnings and the returns to schooling. Higher levels of schooling correspond to higher returns to schooling by ethnic group. Thus there may be a need to target interventions appropriately to the specific ethnic group in question.