Crises and human capital accumulation

Abstract.  This paper studies the effects of crises on human capital formation. Theoretically, a crisis undermines total factor productivity, which reduces the return to working and to accumulating physical capital. If the crisis is temporary, young agents will study now and work later. Human capital rises. To test our model we rely on inflation crises as our main empirical proxy. Using GMM panel procedures, our analysis for 86 countries in 1970–2000 confirms the positive effects of crises on human capital. Our main findings survive several robustness tests. JEL classification: E31, D90     

Exports of primary goods and human capital accumulation

Many developing countries have experienced export‐led growth in the last half century. This paper asks whether the content of what economies export matters for human capital accumulation. We construct a small open economy model and find that expansion of primary exports can harm human capital accumulation if the economy is initially allocating significant resources to the production of primary goods. We then test this prediction empirically using Latin American data over the period 1965 to 2010 and find robust evidence in support of the hypothesis that a shift towards primary exports reduces human capital accumulation. Given the importance of the latter for long‐run growth, our results suggest a potential role for policy intervention.     

Migration, human capital accumulation and economic development

We study how the possibility of migration changes the composition of human capital in sending countries, and how this affects development. In our model, growth is driven by productivity growth, which occurs via imitation or innovation. Both activities use the same types of skilled labour as input, albeit with different intensities. Heterogenous agents accumulate skills in response to economic incentives. Migration distorts these incentives, and the accumulation of human capital. This slows down, or even hinders, economic development. The effect is stronger, the farther away the country is from the technological frontier.     

Within-family inequalities in human capital accumulation in India

We investigate within-family inequalities in human capital accumulation in India. Indicators of the children's current stock of human capital and of investment into their continued human capital accumulation are analyzed, distinguishing between time investments and pecuniary investment into school quality. We employ a within-family model using sibship fixed effects, and find mostly negative birth order effects; that is, earlier-born children are better off. However, for time investments there is a tendency toward more positive birth order effects, especially in poor and large families. This suggests that that opportunity cost of child time matters; in poor and large families the older, more productive, siblings often need to work. The most plausible explanation for negative birth order effects in general is resource dilution at an early age. Older siblings were only children at an early age, and therefore benefited from more parental resources.     

Endogenous population with human and physical capital accumulation

This paper proposes an economic growth model with population growth and physical and human capital accumulation. The physical capital accumulation is built on the Solow growth model (Solow in Q J Econ 70:65–94, 1956). The education and human capital accumulation is influenced by the Uzawa–Lucas model (Uzawa in Int Econ Rev 6:18–31, 1965; Lucas in J Monet Econ 22:3–42, 1988). The population dynamics are influenced by the Haavelmo population model (Haavelmo in a study in the theory of economic evolution. Haavelmo, Amsterdam, 1954) and the Barro–Becker fertility choice model (Barro and Becker in Econometrica 57:481–501, 1989). We synthesize these dynamic forces in a compact framework, applying an alternative utility function proposed by Zhang (Econ Lett 42:105–110, 1993). The model describes a dynamic interdependence between population change, wealth accumulation, human capital accumulation, and division of labor. We simulate the model to demonstrate the existence of equilibrium points and to plot the motion of the dynamic system. We also examine the effects of changes in the propensity to have children, the mortality rate parameter, the propensity to receive education, the human capital utilization efficiency, and the mortality rate elasticity of human capital upon dynamic paths of the system.     

Migration,human capital accumulation and economic development

We study how the possibility of migration changes the composition of human capital in sending countries, and how this affects development. In our model, growth is driven by productivity growth, which occurs via imitation or innovation. Both activities use the same types of skilled labour as input, albeit with different intensities. Heterogenous agents accumulate skills in response to economic incentives. Migration distorts these incentives, and the accumulation of human capital. This slows down, or even hinders, economic development. The effect is stronger, the farther away the country is from the technological frontier.     

Tax avoidance,human capital accumulation and economic growth

Human capital accumulation may negatively affect economic growth by increasing tax avoidance and reducing effective tax rates and productive public investment. This paper analyzes how the endogenous feedback between human capital accumulation and tax avoidance affects economic growth and macroeconomic dynamics. Our findings show that this interaction produces remarkable growth and welfare effects.     

Estimation of optimal human capital accumulation parameters for The Netherlands

Using the theory of optimal investments in human capital in general and Rosen's (1975, 1976) version of it in particular we tried to model and explain aggregate life-cycle income-profiles for The Netherlands in 1965, 1972 and 1979. The model allowed us to estimate and impute human capital accumulation parameters and paths. Changes in rates of return, depreciation rates, the value of the human capital stock and of lifetime human wealth could be identified and compared for the sample years. It was found that, in terms of some of these parameters, public-sector employees gained compared with private-sector employees and employees with higher vocational training gained ground over university-trained employees.     

Efficiency change,technological change and capital accumulation in Italian regions: a sectoral study

This paper examines the sources of labour productivity in the Italian regions during the period 1980–2004. Five economic sectors are investigated using data envelopment analysis (DEA) and taking into account productive specialisation and sector inefficiencies. Labour productivity change is decomposed into five components by means of Malmquist productivity indices: intra-sector efficiency change, composition efficiency change, input-biased technical change, magnitude component technical change and capital accumulation. Using bootstrap procedure, the components of labour productivity changes are statistically tested. Efficiency analysis shows that productive specialisation is not a source of inefficiency and efficiency gains can be obtained by sector-specific policies. Thus, it is possible to obtain improvements in efficiency in each sector of activity rather than reallocating resources among sectors. The results of the decomposition by sectors reveal heterogeneous sources of growth. The total economy has shown evidence of non-neutral technical change and, it has been found that agriculture, industry and construction experienced capital using technical change. The analysis of the decomposition of the labour productivity growth is complemented by an analysis of β-convergence.     

Optimal accumulation in an endogenous growth setting with human capital

This paper considers a three-overlapping-generations model of endogenous growth wherein human capital is the engine of growth. It first contrasts the laissez-faire and the optimal solutions. Three possible accumulation regimes are distinguished. Then it discusses a standard set of tax-transfer instruments that allow for decentralization of the social optimum. Within the limits of our model, the rationale for the standard pattern of intergenerational transfers (the working-aged financing the education of the young and the pension of the old) is seriously questioned. On pure efficiency grounds, the case for generous public pensions is rather weak.     

Mineral wealth and human capital accumulation: a nonparametric approach

This article uses a nonparametric approach to investigate the nexus between mineral wealth and human capital accumulation across countries. Higher mineral wealth is associated with elevated levels of human capital in a cross-section of countries. Matching the overall level of economic development and political instability and violence, weakens but does not reverse this conclusion. These results are economically significant. Moving up from the bottom to the top quartile for subsoil wealth per capita decreases illiteracy by ≈ 12% among young and adult females. Conversely, moving down from the top to the bottom quartile for subsoil wealth per capita decreases the average years of primary and total education by ≈ 1.5 years for females. Results are consistent with Hirschman's conjecture that enclave economies have weaker production linkages but stronger government revenue linkages than other activities. Most importantly, this article argues that caution should be exercised when discouraging countries from exploiting their mineral wealth, especially for countries where human capital is scarce.

I know, [there is] no safe depositary of the ultimate powers of society, but the people themselves; and if we think them not enlightened enough to exercise their control with wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power.     

Return migration, human capital accumulation and the brain drain

In this paper we present a model that explains migrations as decisions that respond to where human capital can be acquired more efficiently, and where the return to human capital is highest. The basic framework is a dynamic Roy model in which a worker possesses two distinct skills that can be augmented by learning by doing. There are different implicit prices, in different countries and different rates of skill accumulation. Our analysis contributes to the literature on the selection of immigrants and return migrants by offering a richer framework that may help to accommodate selection of emigrants and return migrants that are not immediately compatible with the one-dimensional skill model. Our analysis also has implications for the debate on brain drain and brain gain. In the two skills model presented here, return migration can lead to a mitigation of the brain drain, or even the creation of a “brain gain”, where those who return bring the home country augmented local skills.     

Market access and regional dispersion of human capital accumulation in Turkey

Building on early advances in development economics, the theoretical construct of new economic geography asserts that geography plays a crucial role in educational human capital accumulation. Based on this expectation, this study investigates the impact of market access on provincial human capital accumulation in Turkey. Results indicate that market access matters for understanding why some regions lag behind others in terms of average years of schooling. Our results are robust to the inclusion of spatial mechanisms, different specifications of the spatial weight matrix, endogeneity and alternative measurements of market access and to a host of other factors that affect regional human capital accumulation.     

Optimal income taxation with human capital accumulation and limited record keeping

This paper characterizes optimal income taxes in a dynamic economy where human capital is unobservable and the government is restricted to use taxes that depend only on current income. I show that unobservability of human capital tends to decrease the labor wedge, while the effect on the human capital wedge is uncertain. I also analyze the relationship between optimal taxes in economies with and without endogenous human capital and identify two qualitative reasons why the optimal tax codes will differ. I perform numerical simulations to calculate the quantitative relevance of endogenous human capital formation for optimal tax policy. I find that endogenous human capital lowers marginal tax rates by about 9% on average, as compared with a static model without human capital.     

社会保障与人力资本积累:研究综述

一直以来,新古典经济学对社会保障的研究着眼于社会保障与储蓄率的关系,而人力资本理论为社会保障的研究拓宽了范围,将社会保障与人力资本投资联系起来.本文对目前的研究现状和主要观点进行了归纳总结,分三个方面综述了社会保障与人力资本的关系:社会保障与人力资本数量、社会保障与人力资本质量、社会保障管理与人力资本.基本结论主要有:无积累的现收现竹制降低生育率和劳动力流动率,但促进家庭人力资本投资和企业在职培训,从而提高经济中的人力资本水平;社会保障的管理重心应从财务收支平衡转向就业和人力资源管理,可以发挥社会保障从源头规避社会风险的功能.     

Cash-in-advance constraint,optimal monetary policy,and human capital accumulation

This paper investigates optimal monetary policy in an overlapping-generations model with endogenous growth fueled by the accumulation of human capital and under a cash-in-advance constraint. We consider the case where the government finances public education fully by seigniorage. Three main results are obtained. First, there exists an optimal money growth rate that maximizes the economic growth rate along the steady growth path. Second, on this path, the Laffer curve of seigniorage takes the maximum. Finally, the money growth rate for maximizing seigniorage along the steady growth path, which also leads to maximization of the economic growth rate, is lower than that for maximizing seigniorage in the present period.     

Coordinating the accumulation of physical and human capital in different institutional settings

This paper presents an out-of-equilibrium model to explain differences in the capacity to absorb new skill-biased technologies. The usual mainstream viewpoint focusing only on the role of labour markets will be re-examined in a context characterized by a sequential structure of both the processes of production and the skill formation, whose interaction brings about coordination failures harming the viability of the innovation process. Our out-of-equilibrium approach allows us to consider the more general interplay between stylized labour and product market characteristics, on the one hand, and educational policies, on the other hand. The robust results of the simulations show that educational policies appear to be important in restoring the required coordination both in rigid and in flexible systems, but for different reasons. In the former case, educational policies financed by taxation allow the system to escape a low-productivity final equilibrium. In the latter case, they contrast the financial constraint associated with a large decrease in the unskilled wage. Altogether, a moderate degree of rigidity seems to be the most appropriate institutional environment to reach the targets of viability and of a full exploitation of the technological potential.     

Demographic structure and capital accumulation

This paper develops an overlapping-generations (OLG) model to analyze the consequences of demographic structure changes induced by an exogenous shift in the birth rate. We first show that a finite growth rate of the population that maximizes long-run capital per capita exists. Then, we examine the theoretical properties of this growth rate by showing that: (i) it corresponds to the demographic structure such that the average ages of capital holders and workers are equal; (ii) it is associated to an efficient steady state; (iii) it increases with compulsory transfers from younger to older generations. Finally, we explain why standard OLG models do not exhibit such a growth rate.     

Demographic change,human capital accumulation and R&D‐based growth

Employing an overlapping generations model of R&D‐based growth with endogenous fertility and education decisions, we examine how demographic changes induced by an increase in life expectancy influence the long‐run growth rate of the economy. We demonstrate that life expectancy, when relatively low (high), positively (negatively) affects economic growth. This paper also compares the growth implications of child education subsidy policies (i.e., policies for enhancing basic education) and child rearing subsidy policies (i.e., pro‐natal policies) and demonstrate that while the child education subsidies consistently foster economic growth, child rearing subsidies may negatively affect economic growth.     

Cultural determinants of human capital accumulation: Evidence from the European Social Survey

Although economists commonly view the accumulation of human capital as a key driver of economic development, what drives cross-country differences in human capital accumulation remains poorly understood. I use an epidemiological approach involving second-generation migrants to test for a possible cultural gradient in individuals’ propensity towards human capital accumulation. Results indicate a strong relationship between country-of-origin culture and human capital accumulation and are robust to using years of education instead of individuals’ engagement in human capital accumulation as the dependent variable. Drawing on dimensions of cultural differences identified in culture frameworks developed by cross-cultural researchers, results further suggest that cultural emphasis on intellectual autonomy helps explain part of the observed differences in human capital accumulation. However, further work is needed to complete our understanding of the cultural roots of individuals’ propensity towards human capital accumulation.