The Political Economy of Domestic Labor Mobility: Specific Factors,Landowners, and Education

Political actors today seek to influence labor mobility via education just as they have for centuries. Landowners in countries with large industrial sectors attempt to suppress education levels to maintain their labor supply, as educated workers are able to move into industrial work more easily than uneducated workers. However, the relationship between large landowners and education is more complex than has been previously theorized. Using a specific‐factors model, I show that large landowners in countries with little economic development actually have an incentive to increase education levels. They realize the returns of an educated workforce without fearing their mobility because competing industrial opportunities for the workers do not exist. In either case, the ability of landowners to achieve their political goals is a function of their ability to overcome the collective action problem and effectively influence the state's provision of education. Powerful landowners successfully deny education in industrialized countries and provide it in agricultural countries. An analysis of panel data covering 77 countries from 1975 to 2000 confirms the conditional nature of the relationship.     

Worker turnover at the firm level and crowding out of lower educated workers

This paper investigates whether employers exploit cyclical downturns to improve the average skill level of their work force. We use a unique dataset that contains information on workers, jobs as well as firm characteristics. Our findings are that at each job level mainly lower educated workers leave during downturns. Furthermore, at each level of job complexity, workers with a higher education are not more productive than lower educated workers. We find no evidence that higher educated workers crowd out lower educated workers during recessions.     

Human capital and the re‐employment of retrenchment labor in urban China

The inefficiency of state‐owned enterprises, followed by the economic reform in urban China, resulted in large‐scale retrenchment during the late1990s. The laid‐off workers were middle‐aged, not well educated and had accumulated a lot of firm‐specific human capital that was unlikely to be of value in the product market. In this study, we investigate how differently human capital affects laid‐off workers’ occupation choices: self‐employment, re‐employment and remaining unemployed. Using 2002 Chinese Household Income Project and 2009 Urban Household Survey datasets, we find that although general human capital measured by education is positively related to the probability of finding a job, it is negatively associated with the probability of self‐employment. Displaced workers with more sector‐specific work experience are more likely to be self‐employed than to be employed by others. Government‐sponsored training significantly increases the likelihood of finding a job. Health is positively associated with re‐employment.     

Education,Rent seeking and the Curse of Natural Resources

Empirical evidence suggests that natural resources breed corruption and reduce educational attainments, dampening economic growth. The theoretical literature has treated these two channels separately, with natural resources affecting growth either through human capital or corruption. In this article, we argue that education and corruption are jointly determined and depend on the endowment of natural resources. Natural resources affect the incentives to invest in education and rent seeking that in turn affect growth. Whether natural resources stimulate growth or induce a poverty‐trap crucially depends on inequality in access to education and political participation, as well as on the cost of political participation. For lower inequality and higher cost of political participation, a high‐growth and a poverty‐trap equilibrium coexist even with abundant natural resources.     

Educational attainment and cohort size

"We argue that the postwar baby boom [in the United States] caused substantial fluctuations in both the economic rewards to education and educational attainment over the last 3 decades. If substitutability between young and old workers diminishes with education, the present value of lifetime earnings for a boom cohort is depressed more for highly educated workers, reducing incentives for educational attainment. The opposite is true for pre- and postboom cohorts. The diminishing substitutability hypothesis explains the declines in both the returns to college and college completion rates in the 1970s and predicts a substantial increase in educational attainment for postboomers."     

The productivity challenge. What to expect from better-quality labour and capital inputs?

The aim of this article is to develop and implement an analytical framework assessing whether better-quality inputs, via a rise of TFP, could compensate an ageing-induced slowing of economic growth. Here ‘better-quality’ means more educated and older/more experienced workforces; and also better-quality capital proxied by its ICT content. Economic theory predicts that these trends should raise TFP. To assess these predictions, we use EU-KLEMS data, with information on the age/education mix of the workforce, as well as the importance on ICT in total capital, for 34 industries within 16 OECD countries, between 1970 and 2005. We generalize the Hellerstein–Neumark labour-quality index method to simultaneously capture workers’ age/experience or education contribution to TFP growth, alongside that of ICT. The conclusion of the article is that the quality of inputs matters for TFP. We find robust microeconometric evidence that better-educated and older/more experienced workers are more productive than their less-educated and younger/less-experienced peers. Also, ICT capital turns out to be more productive than other forms of capital. And when used in a growth accounting exercise covering the 1995–2005 period, these estimates suggest that up to 40% of the recorded TFP growth could be ascribed to the rising quality of inputs.     

农民工犯罪类别的决定因素——基于监狱调查数据的实证分析

基于监狱调查数据,本文分析了农村户籍服刑人员和普通农民工之间,以及服刑人员内部在个人基本信息、性格特质和家庭背景三个维度上的差异。研究发现农民工罪犯主要参与暴力犯罪和盗窃。与农民工相比,服刑人员总体上年纪小,教育不足,认知能力和性格特征存在缺陷,兄弟姐妹多,母亲教育程度低。区分不同犯罪类型,以上特征多表现在暴力犯和盗窃犯身上;而涉毒犯和经济犯的特征为进城时间长、认知能力强和无差异的年龄及母亲教育程度。     

Low-Growth Equilibrium Accompanied by High Levels of Educational Attainment

The paper demonstrates the low-growth trap associated with high educational attainment in an overlapping-generations model by examining the dual positive effect of senior educated workers in leading-edge technology: on technological progress and on young workers' on-the-job learning. If new technology is sufficiently productive, young workers will demand education to update technology when old, and high technological growth is sustained in the future. Conversely, if new technology is unproductive, they will demand education merely to improve the skills necessary for existing technology, and technological progress will stagnate. Nevertheless, vigorous investment in education occurs since young workers have little hope for on-the-job learning.
JEL Classification Numbers: I20, J24, O33, O40.     

Human capital use,innovation, patent protection,and economic growth in multiple regions

We provide the first theoretical analysis of the effects of human capital use, innovative activity, and patent protection, on economic growth in a model with many regions. In each region, consumers have constant relative risk-aversion preferences, there is no human capital growth, and there are three kinds of manufacturing activities involving the production of blueprints for inputs (machines), the inputs themselves, and a single final consumption good. Our analysis generates four results. For any given region, we first describe the balanced growth path (BGP) equilibrium and show that the BGP growth rate depends negatively on the rate at which patents expire. Second, we characterize the transitional dynamics in our model. Third, we determine the value of the patent expiry rate that maximizes the equilibrium growth rate of a region. Finally, we show that a policy of offering perpetual patent protection does not necessarily maximize social welfare in a region.     

Individual Preferences for Trade Partners in Taiwan

This article investigates economic factors and non‐economic factors of individual attitudes toward free‐trade agreements with different countries. Based on the Stolper–Samuelson theorem, highly skilled workers in Taiwan should be more supportive of free trade with China and less supportive of free trade with the United States than should unskilled workers in Taiwan. Using survey data from Taiwan, we find that highly educated people in Taiwan are more supportive of free trade with both the United States and China, and the effects of education are much stronger with respect to free trade with China. We also find that individual risk attitudes, national identity, and ethnicity play important roles in explaining trade preferences.     

Increasing dispersion of skills and rising earnings inequality

In recent decades many countries have simultaneously liberalized their trading regimes and expanded their education systems. The theoretical effect of these regime shifts on the wage differential between skilled and unskilled workers is ambiguous. On the one hand, openness to trade causes demand shifts in the labor market which may widen or narrow the differential. This result depends on whether the unskilled wage is depressed, as in the case of importing countries, or raised, as in the case of exporting countries. On the other hand, an increased supply of more educated workers reduces their wages and narrows the skill wage gap. In this study of the labor market of Hong Kong, we document that recent changes in response to the trade liberalization of Mainland China and expanded access to education have increased the earnings differential between skilled and unskilled workers. Using detailed census data, we argue that the main reason for this outcome is the widened dispersion of skills across the earnings distribution, resulting from demand and supply shifts in the labor market caused by trade openness and expanded access to higher education.     

Using propensity matching estimators to evaluate the impact of privatization on wages

Whether the transfer of ownership rights to the private sector leads to a decline or increase in wage growth is theoretically ambiguous, given that the outcome depends on the uncertain interaction between firms and workers. Using propensity matching techniques, this article investigates the effects of privatization on wages in the Portuguese banking industry. The empirical results, obtained from Quadros de Pessoal for the period between 1989 and 1997, generally show a negative (positive) short-run (long-run) effect of privatization on relative wage growth for both men and women retained in the privatized firms. Moreover, the results show that the most educated and experienced (oldest) workers, as well as those in the high skill occupational categories, were more likely to experience a negative wage effect.     

发展职业教育还是普通教育——基于经济增长和教育回报视角的文献述评

国外文献显示,从人力资本特征来看,职业教育和普通教育在创新成本和投资回报期上存在差异。从经济增长的视角来看,职业教育的规模与经济发展水平似存在倒U型关系。目前国内针对职业教育的研究总体不足,实证研究结果存在明显差异。今后对于职业教育发展的研究应从侧重于"问题"分析转向"理论"探究。     

Political change and informality

This paper examines informality during the political and economic turmoil that accompanied the Arab Spring revolution in Egypt. The paper focuses on unprotected employment and the extent to which it changed by educational level immediately after the January Uprising of 2011. We find that over time and particularly after the revolution, informal employment has increased for both high‐ and low‐educated workers, albeit through different paths: high‐educated workers were more likely to be stuck in informality, while low‐educated formal workers were more likely to lose their contracts. The increase in informal employment in the wake of the Arab Spring is more pronounced for the high‐educated. The results suggest a high level of rigidity in the Egyptian labour market, even in the wake of the Arab Spring.     

Income Distribution Dynamics with Endogenous Fertility

Developing countries with highly unequal income distributions, such as Brazil or South Africa, face an uphill battle in reducing inequality. Educated workers in these countries have a much lower birthrate than uneducated workers. Assuming children of educated workers are more likely to become educated, this fertility differential increases the proportion of unskilled workers, reducing their wages, and thus their opportunity cost of having children, creating a vicious cycle. A model incorporating this effect generates multiple steady-state levels of inequality, suggesting that in some circumstances, temporarily increasing access to educational opportunities could permanently reduce inequality. Empirical evidence suggests that the fertility differential between the educated and uneducated is greater in less equal countries, consistent with the model.     

The Prospect of Migration,Sticky Wages,and “Educated Unemployment”

An increase in the probability of work abroad, where the returns to schooling are higher than at home, induces more individuals in a developing country to acquire education, which leads to an increase in the supply of educated workers in the domestic labor market. Where there is a sticky wage rate, the demand for labor at home will be constant. With a rising supply and constant demand, the rate of unemployment of educated workers in the domestic labor market will increase. Thus, the prospect of employment abroad causes involuntary “educated unemployment” at home. A government that is concerned about “educated unemployment” and might therefore be expected to encourage unemployed educated people to migrate will nevertheless, under certain conditions, elect to restrict the extent of the migration of educated individuals.     

Education public financing and economic growth: an endogenous growth model versus evidence

Using an Endogenous Growth Model with physical and human capital and unemployment (Mauro and Carmeci in J Macroecon 25:123–137, 2003), we study the effects of subsidies to education in economic growth. According to the model, we conclude that government subsidies to education only enhance economic growth conditional on unemployment and that this relationship is negatively influenced by unemployment. We provide evidence from a broad panel data of countries that confirms the importance of unemployment in the relationship between subsidies to education and economic growth but dismiss its importance as a direct determinant of economic growth.      

International Labor Union Policy and Growth with Creative Destruction*

A multi‐economy Schumpeterian growth model is constructed. Economies are interdependent through technology transfer. Households can stay as workers or become researchers at some cost. Workers are employed in production and researchers in R&D. Workers are unionized and union power depends on the government's protection. The main findings are as follows. If international technological dependence increases, then workers’ wages, the growth rate, and the level of welfare fall. The international coordination of labor union policy raises workers’ wages and promotes growth and welfare.     

Searching for empirical linkages between demographic structure and economic growth

Demographic structure could affect economic growth through many channels. However, little is known about how demographic structure affects economic growth since no study has examined an extensive collection of channels through which demographic structure could affect economic growth in a single context. This paper overcomes this limitation by examining 45 potential mediating variables between demographic structure and economic growth. A causal search algorithm is used to identify channels through which demographic structure affects economic growth. Our results suggest that demographic structure affects economic growth differently between developed and developing countries. For developed countries, we find that an increase in the share of middle-aged workers has a positive effect on economic growth through institutions, investment and education channels. On the other hand, an increase in the share of the senior population has a negative effect on economic growth through institutions and investment channels. For developing countries, we find (but with weak evidence) that an increase in the share of young workers has a negative effect on economic growth through investment, financial market development and trade channels.     

Precautionary Demand for Education, Inequality, and Technological Progress

This paper offers an explanation for the evolution of wage inequality within and between industries and education groups over the past several decades. The model is based on the disproportionate depreciation of technology-specific skills versus general skills due to technological progress, which occurs randomly across sectors. Consistent with empirical evidence, the model predicts that increasing randomness is the primary source of inequality growth within uneducated workers, whereas inequality growth within educated workers is determined more by changes in the composition and return to ability. Increasing randomness generates a precautionary demand for education, which we show empirically to be significant.