HUMAN CAPITAL FORMATION AND TAX EVASION

A strictly risk‐averse individual with an exogenous gross income in period one can acquire human capital in the same period and evade taxes. Period‐two income rises with educational investments in period one and can also be hidden from tax authorities. It is shown that a greater tax deductibility of educational investments and higher individual ability induce a positive correlation between tax evasion and educational investments in period two, whereas the relationship in period one is ambiguous. These theoretical predictions can explain diverse empirical findings on the correlation between education and tax evasion.     

人力资本、技术进步与内生经济增长

在内生增长理论中,卢卡斯认为人力资本积累是经济增长的原动力,罗默则认为技术进步是经济增长的源泉。本文构建了一个内生增长模型,以解释人力资本积累和技术进步共同推动经济增长的机制。     

ENDOGENOUS GROWTH, HUMAN CAPITAL, AND INDUSTRY WAGES

Lucas' model (1988) of external effects of human capital formation is taken as a starting point for looking at the impact of human capital on wages. Even though most empirical tests of New Growth Theory are made using time-series and cross-sections of countries — with good reasons — I suggest a microeconometric approach in order to test Lucas' basic assumption of external effects of human capital. As a first step, internal effects of education are filtered out by using wage functions for individuals in Austria. In the second step, resulting industry wage premiums are regressed on industry-specific characteristics and, above all, on average human capital in the industry to account for external effects of human capital.     

HUMAN CAPITAL FORMATION AND CONTINUOUS TRAINING: EVIDENCE FOR EU COUNTRIES

This paper links data on continuous training from the EU Labour Force Survey (LFS) to information on skill levels and earnings from the EU KLEMS growth and productivity accounts, to examine the relative magnitudes of continuous workforce training versus human capital formation through the general education system in the European Union. The measurement methodology draws from the literature on measuring intangible investments by firms and sources of growth in an accounting framework. The results suggest that in the EU15 group of countries, intangible investments in continuous training represent just under 2 percent of GDP or about 35 percent of expenditure on general education. The share of GDP accounted for by training is less than a third as large in the new member states. A growth accounting method is employed to show that failure to account for continuous training leads to an underestimate of the impact of human capital on output growth in the EU.     

TIME‐VARYING EFFECTS OF HUMAN CAPITAL ON MILITARY RETENTION

This paper examines how human capital acquired at the onset of a military career has an evolving effect on retention decisions. Using data of Marine officers that extends across 20‐year horizons, estimates of the hazard related to separation rates indicate that initial differences in general and firm‐specific human capital have time‐varying effects on retention across the duration of a career. Additional evidence suggests that the effects of higher economy‐wide unemployment as well as the onset of wars succeeding from September 2001 also change retention decisions and depend on officers' length of service. (JEL J6, J41, J45)     

FISCAL POLICY IN AN ENDOGENOUS GROWTH MODEL WITH PUBLIC CAPITAL AND POLLUTION

This paper studies the growth and welfare effects of fiscal policy in an endogenous growth model with public capital and environmental pollution. I assume that pollution is due to aggregate production, and that it does not have a direct effect on production but only reduces household utility. I study the growth effects of fiscal policy for the model on the balanced growth path, taking transition dynamics into account. I then analyse the welfare effects of fiscal policy along the balanced growth path. Finally, I show how the fiscal parameters must be set so that the competitive economy replicates the social optimum.     

AN ENDOGENOUS GROWTH MODEL WITH PUBLIC CAPITAL AND SUSTAINABLE GOVERNMENT DEBT*

This paper presents and analyses an endogenous growth model with public capital and public debt. It is assumed that the ratio of the primary surplus to gross domestic income is a positive linear function of the debt income ratio which assures that public debt is sustainable. The paper then derives necessary conditions for the existence of a sustainable balanced growth path for the analytical model. Further, simulations are undertaken in order to gain insight into stability properties of the model and in order to analyse growth effects of deficit financed increases in public investment. The latter is done for the model on the sustainable balanced growth path as well as for the model along the transition path.     

HUMAN CAPITAL AND CONVERGENCE: A PRODUCTION‐FRONTIER APPROACH*

Using nonparametric, production‐frontier methods, we decompose labor productivity growth into components attributable to technological change (shifts in the world production frontier), technological catch‐up (movements toward or away from the frontier), and physical and human capital accumulation (movements along the frontier). We find that (1) technological change is decidedly nonneutral, (2) productivity growth is driven primarily by physical and human capital accumulation, (3) the increased international dispersion of productivity is explained primarily by physical capital accumulation, and (4) international polarization (the shift from a unimodal to a bimodal distribution) is brought about primarily by efficiency changes (technological catch‐up).     

ENDOGENOUS HUMAN CAPITAL INVESTMENT AND THE INTERACTION OF FRONTIER AND ADOPTIVE KNOWLEDGE ON GROWTH AND WAGE INEQUALITY

A three-sector, overlapping-generations growth model endogenizes the opportunity cost of human capital formation and the relative skill requirements of invention, innovation, and adoption of general-purpose technologies. As a result, the relative wage of skilled workers is a function of the endogenous ratio of total-to-adoptive knowledge (where the difference in knowledge stocks is frontier knowledge). Comparative statics are examined for the model's seven parameters. Simulations (representing a transition with phases to a more complex level of economic development) are presented for simultaneous exogenous shocks capable of matching (i) observed inverse movements of the relative wage and the detrended relative supply in the USA, (ii) the sharp slowing and recovering US multifactor productivity growth data since the 1970s, and (iii) a reconciliation of data used to support or deny skill-biased technological change as a major force driving up the relative wage since 1980.     

收入差距与公共财政政策:人力资本投资差异的形成与演变

人力资本投资的需求受到经济个体的时间偏好、生产能力与预期收益率等因素的影响。同时,收入差距和公共财政政策都会影响到人力资本投资供给曲线的变动。这造成了不同个体之间在人力资本投资上的差异,产生了他们之间的人力资本差距和收入差距。我国现行的公共财政政策已经成为收入差距快速增长的重要原因。     

SUGGESTIONS FOR TREATMENT OF HUMAN CAPITAL IN NATIONAL ACCOUNTS—WITH ILLUSTRATIONS FROM INDIAN DATA*

After giving a brief discussion of the biases that exist in the conventional estimation procedures followed in the construction of national accounts, this paper argues for restructuring of national accounts so as to treat human capital formation as investment rather than consumption and suggests that a beginning should be made in respect of schooling. The argument is based on the notion that “investment” or “capital” is that which yields future income streams and also on the rather obvious point that treating as consumption large outlays that really constitute investment distorts analyses of resource allocation, growth and income distribution, and obscures intersectoral relations. It is pointed out that the proposed restructuring of national accounts is more relevant and important for developing countries, many of which are embarked on investment planning. Another major point emphasized is that the input of students’time should be properly measured and included in the estimates of capital formation by schooling. To illustrate what these proposals imply, revision has been attempted of the estimates of (a) educational outlay (or activity in the education sector), (b) gross capital formation, and (c) gross national product, pertaining to the national accounts of a major developing country, namely India, for the years 1960–61 through 1965–66. The modified estimates, though first approximations and covering only a part of the human capital formation and having a systematically downward bias, nevertheless indicate an upward revision of the estimate of activity in the education sector by about 200 to 300 percent, of gross capital formation by about 50 percent and of the gross national product by 4 to 7 percent. These magnitudes show the substantial order of distortion involved in the conventional procedures.     

A MIXED NASH–WALRASIAN EQUILIBRIUM MODEL WITH ENDOGENOUS STEALING AND ENDOGENOUS SPECIALIZATION

Abstract. Using a price vector and a conjecture about a population's activities, this paper suggests that a mixed Nash–Walrasian equilibrium (NWE) occurs if, when every individual maximizes her utility under her conjecture, the trading markets and the theft ‘markets’ are all cleared. Thus, in our model the property rights system, instead of giving protection directly to producers, is aimed mainly at discouraging illegal behaviour. As a result, the equilibrium of the economy is seen to depend not only on self‐protection and/or the legal system itself, but also on the transportation efficiency of the economy.     

EVOLUTION OF GENDER DIFFERENCES IN POST‐SECONDARY HUMAN CAPITAL INVESTMENTS: COLLEGE MAJORS

Although women in the United States now complete more college degrees than men, the distribution of college majors among college graduates remains unequal, with women about two‐thirds as likely as men to major in business or science. We develop and estimate a dynamic, overlapping generations model of human capital investments and labor supply. We allow for specific college major choices, instead of aggregating these choices to the education level. Results show that changes in skill prices, higher schooling costs, and gender‐specific changes in home value were each important to the long‐term trends.     

OPTIMAL UNEMPLOYMENT INSURANCE,WITH HUMAN CAPITAL DEPRECIATION,AND DURATION DEPENDENCE*

This article introduces the possibility of a deterioration in job opportunities during unemployment into the standard optimal unemployment insurance (UI) design framework and characterizes the efficient UI scheme. The optimal program may display two novel features, which cannot be present in stationary models. First, UI transfers are bounded below by a minimal assistance level that arises endogenously in the efficient contract. Second, the optimal scheme implies a wage subsidy for long‐term unemployed workers. Numerical simulations based on the Spanish and U.S. economies suggest that both assistance transfers and wage subsidies should be part of the UI scheme in these countries.     

HUMAN CAPITAL IN CHINA, 1985–2008

We estimated China's human capital stock from 1985 to 2008 based on the Jorgenson–Fraumeni (J–F) lifetime income framework. In order to accommodate the Chinese data and to capture human capital accumulation through both formal education and informal training, we modified the original J–F method by incorporating the Mincer model. We calculated total and per capita human capital stock for different population groups, and studied their trends and dynamics during the course of economic transition. We also constructed Divisia indexes of various orders to evaluate the contribution of different factors to the growth of human capital in China.     

THE WELFARE GAINS OF AGE‐RELATED OPTIMAL INCOME TAXATION

Using an overlapping generations model with skill uncertainty and private savings, we quantify the gains of age‐dependent labor income taxation. The total steady‐state welfare gain of switching from age‐independent to age‐dependent nonlinear taxation varies between 2.4% and 4% of GDP. Part of the gain descends from relaxing incentive–compatibility constraints and part is due to capital‐accumulation effects. The welfare gain is of about the same magnitude as that which can be achieved by moving from linear to nonlinear income taxation. Finally, the welfare loss from tax‐exempting interest income is negligible under an optimal age‐dependent labor income tax.     

A MATCHING MODEL WITH ENDOGENOUS SKILL REQUIREMENTS>*

We consider a labor market in which workers differ in their abilities and jobs differ in their skill requirements. The distribution of worker abilities is exogenous, but we model the choice of skill requirements by firms. High‐skill jobs produce more output than low‐skill jobs, but high‐skill jobs require high‐skill workers and thus are more difficult to fill. We use a matching model together with a Nash bargaining approach to wage setting to determine the equilibrium mix of job types, along with the equilibrium relationship between worker and job characteristics, wages, and unemployment.     

LABOR‐MARKET FRICTIONS,HUMAN CAPITAL ACCUMULATION,AND LONG‐RUN GROWTH: POSITIVE ANALYSIS AND POLICY EVALUATION*

We construct a search model with endogenous human capital and labor participation to study the growth effects of short‐run frictions and the effectiveness of human capital policies. Employment, learning effort, and output growth increase with more effective learning, better labor‐market matching, lower job separation, or less costly vacancy creation. Although output growth, employment, vacancy creation, and learning and search effort are most responsive to changes in a human capital policy that directly affects learning effort, such a policy need not be more beneficial for welfare. The effects of human capital policies become larger as the severity of labor‐market frictions rises.