Tariff change,foreign capital and immiserization: A theoretical analysis

This paper analyzes the possibility that tariff reductions in the presence of foreign capital may be immiserizing. Other impacts of tariff revisions in a Latin America-like context are also discussed.     

Gender differences in social capital investment: Theory and evidence

This paper analyses individual social capital investment by extending the investment model of Glaeser et al. (2002) to allow for differing types of social capital. A dynamic solution to the individual's maximisation problem illustrates differences in social capital investment dependent on the conversion factor of investment. An empirical section finds that females invest more and derive greater wellbeing from this type of social capital investment; consistent with a higher conversion factor. The findings have implications for the work–life balance policies within firms and provide another explanation for gender differences in earnings.     

Finance,investment and innovation: A theoretical and empirical comparative analysis

The paper compares the relative efficiency of country models in the relationship between finance and investments. Results, confirmed under three different panel data estimates (Arellano-Bond GMM method, random and fixed effect estimates) suggest that: i) the UK thick market reduces informational asymmetries for large firms and for those firms providing good signals to shareholders; ii) the Japanese vertical (between firms and banks) integration and horizontal (among firms) integration almost eliminates financial constraints (the horizontal integration effect) and equates agency costs across firms (the vertical integration effect). These results are consistent with the short-termist hypothesis which assumes that the Japanese economic system can process information more efficiently reducing managerial myopic behaviour and thereby determining positive effects on long term growth.     

Migration,remittances and human capital investment in Kenya

This paper investigates the relationship between international migration, remittances, and human capital investment in Kenya. We use household‐level data from the 2009 Kenya Migration Household Survey (which was part of the Africa Migration Project) to test our hypothesis and uncover a positive and significant relationship between the amount of international remittances a household receives and the amount of expenditures allocated to education (for all levels of education). We consider various robustness checks and find that our results hold up to various specifications, including an instrumental variable approach.     

Human capital, inequality, endogenous growth and educational subsidy: A theoretical analysis

This paper develops an endogenous growth model with dualism in human capital accumulation of two types of individuals. The government imposes a proportional income tax on rich individuals and uses the tax revenue to finance the educational subsidy given to poor individuals. We find out the properties of the optimal tax financed educational subsidy policy in the semi-stationary equilibrium of the model using the technique of Stackelberg differential game.     

教化投资:人力资本投资的新形式

本文针对现有的人力资本理论将人力资本投资形式局限于教育、培训、医疗、保健和迁移,而对其他投资形式关注不足的现实,认为适应于现代经济生活相关的思想观念、价值取向和道德规范,需要相关投入才会形成,这些投入也是人力资本投资不可或缺的形式,笔者将其概括为教化投资。经济转型过程凸显了教化投资的重要性。教化投资增强了人力资本的资源配置能力,在扩大个体人力资本存量的同时,还提升了社会经济价值,增加了社会资本。     

Auctions for social lending: A theoretical analysis

Prosper, today the second largest social lending marketplace with nearly 1.5 million members and $380 million in funded loans, employed an auction mechanism amongst lenders to finance each borrower's loan until 2010. Given that a basic premise of social lending is cheap loans for borrowers, how does the Prosper auction do in terms of the borrower's payment, when lenders are strategic agents with private true interest rates? We first analyze the Prosper auction as a game of complete information and fully characterize its Nash equilibria, and show that the uniform-price Prosper mechanism, while simple, can lead to much larger payments for the borrower than the VCG mechanism. We next compare the Prosper mechanism against the borrower-optimal auction in an incomplete information setting, and conclude by examining the Prosper mechanism when modeled as a dynamic auction, and provide tight bounds on the price for a general class of bidding strategies.     

Education policies,pre-college human capital investment and educated unemployment

Journal of Economics - This paper employs a search and matching model featuring endogenous pre-college human capital investment to examine how education policies, such as subsidies, scholarships,...     

International technology spillovers,human capital and productivity linkages: evidence from the industrial sector

The paper estimates an empirical model that is consistent with a variety of Research and Development (R&D)-driven models of growth where technology is transmitted via trade to other industries, both domestically and internationally, by being embodied in differentiated intermediate goods. The evidence is based on data from 21 manufacturing industries in six European Union countries for the period 1980–1997. The contribution of the paper lies in showing how by including human capital in the model and employing suitable econometric procedures the magnitude of R&D spillovers reported in the existing literature can be affected, while pointing to a major role of human capital in economic growth process.     

The co-evolution of tax evasion,social capital and policy responses: a theoretical approach

The dynamic model presented in this paper intends to account for the evidence, which appears to be particularly significant for Italy, of the incidence of tax evasion in a certain region being negatively correlated with the level of social capital existing in that region. Besides including social capital among the determinants of tax evasion, we extend the model so as to incorporate a mechanism whereby the existing volume of opportunistic behavior—which is proxied by the level of tax evasion—has negative effects on the formation of new social capital, thus helping to explain how regional differences in the endowment of social capital and in the incidence of tax evasion co-evolve and why they tend to be highly persistent. The model seeks also to capture the fact that in a democracy the political determination necessary to effectively repress tax evasion depends on the voters’ propensity toward the phenomenon. Hence, one should expect that–in areas where a relatively large (small) number of citizens are tax cheaters—the consensus in favor of tough policies against tax evasion tends to be weak (strong) and short (long) lasting. Consistently with this intuition, the model shows that regions where social capital is relatively low and tax evasion is relatively high can do better in the long run (i.e., they can reach a steady state characterized by a higher level of social capital and a lower level of tax evasion) when tax-enforcement policies are determined at the national level rather than at the regional level. The opposite holds for regions where social capital is relatively high and tax evasion is relatively low.     

Credit constraint and human capital investment: an empirical analysis using Brazilian household budget survey

This article is a first step towards understanding the relationship between credit market imperfections and inequality of opportunity in skill formation. The main goal is to investigate the effects of the credit constraint on the optimal human capital decision, in terms of degree of schooling, taking into account the household preferences for education. Our starting point is a theoretical model of human capital investment decision with credit constraint. Following a previous model in the literature, we propose a reduced-form approach that estimates the relation between education decision and initial wealth in Brazil. Our empirical analysis is conducted using data from a Brazilian Household Budget Survey (Pesquisa de Orçamentos Familiares), for years 2002–2003 and 2008–2009. Our results point out that education decision is in fact credit constrained. The empirical results show a strong and highly significant effect of wealth on educational level of children, teenagers and adults, even controlling by education expenditures. But we find no evidence of credit constraint on high level education decision, like undergraduate and graduate levels.     

Real option,human capital investment returns and higher educational policy

This paper incorporates the concept of real option into a modified Harris–Todaro model to investigate the relationship between higher education and unemployment rates. We found that the real option value of waiting to invest in graduate school education will decrease when the expected wage rate of labors with an undergraduate degree becomes relatively lower than that with a graduate degree. As a result, more undergraduate students will decide to go to graduate schools immediately after graduation. As the supply of labors with a graduate degree increases and the job creations fail to meet the increasing demand, those who cannot get a graduate-level job will be willing to accept job offers lower than their education level. Our modified Harris–Todaro model shows that it will lead to an increase in the number of unemployed and underemployed higher educated labors. This explains why the unemployment rates for higher educated labor are relatively high in some developed countries.     

Social learning,neighborhood effects,and investment in human capital: Evidence from Green-Revolution India

This paper empirically identifies social learning and neighborhood effects in schooling investments in a new technology regime. Social learning implies that learning is most efficient when observed heterogeneity in schooling is greatest. The estimates of learning-investment rule, from farm household panel data at the onset of the Green Revolution in India, show that (i) agents learn about schooling returns from income realizations of their neighbors, and (ii) the speed of learning is high when the variation of schooling is large. Thus, schooling distribution of the parents' generation in a community has externalities to schooling investments in children. Simulations show that the variations in schooling within and across communities generate variations in child enrollment rate and average household income.     

Economic liberalization, capital mobility and informal wage in a small open economy: A theoretical analysis

Empirical evidence suggests that the size of the informal sector in the developing countries has increased considerably during the liberalized economic regime. The present paper purports to analyze the consequences of economic reforms on the wellbeing of the informal sector workforce using a three-sector general equilibrium model with two informal sectors. The theoretical analysis finds that different liberalized policies produce diverse effects on the informal wage and that these results are independent of the nature of capital mobility between the informal and the formal sectors. It also shows that labour market reforms, contrary to the common wisdom, are likely to produce favourable effects on the informal wage.     

Social security incentives,human capital investment and mobility of labor

Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the country with earnings-related benefits to a country with flat-rate benefits may reduce their investment in education. Allowing for migration may generate an intertemporal Pareto-improvement with cross-border transfers, and the contribution rates satisfying certain conditions. However, these conditions are not satisfied with those contribution rates that would arise if the governments maximize the welfare of their citizens without migration.     

Life expectancy, human capital, social security and growth

We analyze the effects of changes in the mortality rate upon life expectancy, education, retirement age, human capital and growth in the presence of social security. We build a vintage growth, overlapping generations model in which individuals choose the length of education and the age of retirement, and where unfunded social security pensions depend on workers' past contributions. Social security has a positive effect on education, but pension benefits favor reductions in retirement age. The net effect is that starting from a benchmark case, higher life expectancies give rise to lower per capita GDP growth in the presence of social security as the share of the active population is reduced. In addition, higher social security contribution rates reduce the growth rate of per capita GDP.     

Parental investment in children's human capital in urban China

The present study tests the extent of parental forgone consumption used instead to invest in children's human capital by use of intrahousehold resource allocation models. Using an unusual, comprehensive data set for urban China, there is more spending on boys aged 13 to 15 but more on girls aged 16 to 18, suggesting that standard human capital theories and traditional perceptions of gender bias do not completely explain educational expenditure decisions. The evidence from urban China is consistent, though, with human capital models which consider parental intertemporal preferences. Also, the findings suggest that the perceived bias in favour of sons exists weakly in contemporary urban China.     

Corporate valuation and social capital: a cross-country analysis

This article analyses the influence of social capital on corporate valuation for a sample of 55 countries over the period 1995–2012. The results suggest that social capital is an important determinant of corporate valuation. Interpersonal trust and civic cooperation enhance corporate valuation, even though other institutional and legal characteristics are considered. Furthermore, our results reveal that corporate valuation increases with the GDP annual growth rate, legal enforcement and the protection of shareholders’ rights, but that it is negatively affected by corruption and protection of creditors’ rights. We also obtain some evidence suggesting that civic cooperation has a greater influence over corporate valuation in poorer countries.