Human Capital Transfers Research Articles

Immigration from China to Canada in the Age of Globalization: Issues of Brain Gain and Brain Loss

Historically, waves of immigrants who contributed to the labour supply needed for agricultural settlement and industrial expansion. Since the end of the Second World War, there has been a change in how immigrantreceiving countries have framed immigrant selection policies. As advanced industrial economies experienced an increased demand for skilled workers, the shift has been to an evaluation of the human capital and skill of prospective immigrants, rather than criteria based on national or racial origin. Under the influence of economic globalization, the recruitment of highly skilled workers has become a more pressing issue for immigrant-receiving countries like Canada and the US. The purpose of this paper is to examine the recent trends of immigration from China to Canada and to analyze the economic worth of human capital transfer to Canada. The paper provides estimates of the value of human capital transfer to Canada as a result of immigration from China, and assesses how the transferred human capital is being evaluated in the Canadian labour market. The analysis suggests that international migration in the global age involves the transference of human capital and the embedded economic value of such capital, but whether this capital is utilized is contingent upon how the labour market of the receiving country can fully recognize the productivity of such labour.

Nepotism, Incentives and the Academic Success of College Students

This study investigates the role of self-employed parents on their children's post-graduation plans and college success by using a unique data set from a private university in Turkey. We assembled data set by matching college students' administrative records with their responses to a survey we designed. Self-employed parents have a strong negative effect on college success even after accounting for possible ability bias, intergenerational human capital transfers and controlling for various individual characteristics. This suggests that the changing importance of self-employment can alter the amount and mix of human capital flows. The children of self-employed parents are also more likely to have entrepreneurial intent, and are less likely to plan to attend graduate school.

Nepotism or Family Tradition? A Study of NASCAR Drivers

Of the drivers who raced National Association for Stock Car Auto Racing (NASCAR) cup series in 2005, 23 out of 76 had family connections. Family career following is not unique to NASCAR, it is common in many careers such as law, politics, business, agriculture, medicine, and entertainment. Children enter the same career as their parents for reasons of physical-capital transfer, human-capital transfer, brand-name-loyalty transfer, and nepotism. Using a panel data of NASCAR drivers from the last 30 years, the authors test to see which model best explains career following in racing. Their results suggest that nepotism is not present in the career length. Sons do not have longer careers than nonfamily-connected drivers, given the same level of performance. The authors do find that fathers end their careers earlier than performance indicates. Their results also show if nepotism exists, it occurs only with second brothers who follow their first brothers into racing.

Effects of Job Entry Restrictions on Economic Integration - Evidence for Recent Ethnic German Immigrants

We analyze the impact of job entry restrictions on the economic integration of recent ethnic German immigrants, using twelve waves of the German Socio-Economic Panel. The German labor market closely ties job accessibility to vocational education which likely hampers the transferability of foreign human capital. To assess this effect, we compare the job mismatch probabilities of ethnic German immigrants and German natives and the employment probability in jobs that vary by the qualifications they require. Our results suggest that ethnic Germans are disadvantaged upon arrival, yet almost completely assimilate to comparable natives considering these two job quality measures. Furthermore, controlling for these factors explains a considerable share of the earnings gap between ethnic and native Germans.

Skill transferability, regret and mobility

After graduation many students start working in sectors not related to their field of study or participate in training targeted at work in other sectors. In this article, we look at mobility immediately after graduation from the perspective that educational choices have been made when these pupils had little experience of the actual working life in these professions. We develop a model where students accumulate partially transferable human capital but also learn about their professional preferences at the university and during the first years in the labour market. As a consequence of this newly acquired insight, these young workers might realize that working in another occupational field would better fit their preferences, although they are better equipped to work in their own field. The empirical analysis reveals that if wages are 1% lower due to lower skill transferability, the probability that a graduate who regrets his choice actually switches decreases by 1.4 percentage points, while those who switch on average take 0.3 months additional education.

Intergenerational Transfer of Human Capital and Optimal Education Policy

This paper studies the design of education policies in a setting of successive generations with heterogeneous individuals (high and low earning ability). Parents' investment in education is motivated by warm glow altruism and determines the probability that a child has high ability. Education policies consist of a subsidy on private educational investments and possibly of public education. We show that when an income tax is available, the subsidy on education should not depend on redistributive considerations. Instead, it is determined by two terms. First, a Pigouvian term which arises because under warm glow altruism parents' utility does not properly account for the impact of education on future generations. The second term captures a 'merit good' effect, which arises when the warm glow term is not fully included in social welfare (possibility of laundering out). The two terms are of opposite sign and the optimal subsidy may be positive or negative. Finally, we derive conditions under which public education is welfare improving and show that total crowding out of private expenditure (for one of the types) may be desirable.

Is workers' mobility a source of R&D spillovers?

PurposeThis study asks whether working in a R&D intensive industry affects a worker's wage profile. If R&D investment translates into transferable human capital or knowledge, workers' mobility constitutes a negative externality from the point of view of the firm/industry that bears the cost of R&D activities. A steepening of the wage profile would address such externality.Design/methodology/approachUsing PSID data combined with US BEA data on US manufacturing industries' R&D intensities between 1981 and 1992, regression analysis is used to explore the hypothesis that, similarly to general training, industry R&D steepens a worker's wage‐experience profile.FindingsIn general the evidence is mixed. The results obtained from biennial wage growth regressions support to some extent the hypothesis that exposure to R&D activities allows a specific group of workers to accumulate general human capital for which they pay a positive price in early stages of their career.Research limitation/implicationsAn important caveat applies to the results. Unlike previous research by Møen who uses firm level R&D, the results found in this study are generated by using industry level R&D, which, being possibly affected by severe measurement errors, may bias the estimated coefficients towards zero.Originality/valueThis study complements Møen's evidence based on Norwegian wages with the effects of industry‐specific R&D intensities on the earnings profile in US manufacturing industries. By investigating whether industry R&D affects the return to experience and/or to tenure this study addresses an overlooked issue of which type of skills R&D allows workers to accumulate.

Skill Transferability, Regret and Mobility

After graduation many students start working in sectors not related to their field of study or participate in training targeted at work in other sectors. In this paper, we look at mobility immediately after graduation from the perspective that educational choices have been made when these pupils had little experience of the actual working life in these professions. We develop a model where students accumulate partially transferable human capital but also learn about their professional preferences at the university and during the first years in the labor market. As a consequence of this newly acquired insight, these young workers might realize that working in another occupational field would better fit their preferences, although they are better equipped to work in their own field. The empirical analysis reveals that if wages are 1% lower due to lower skill transferability, the probability that a graduate who regrets his choice actually switches decreases by 2.2 percentage points, while those who switch on average take 0.3 months additional education.

UNEMPLOYMENT RISK AND COMPENSATING DIFFERENTIALS IN NEW JERSEY MANUFACTURING

We present evidence that low‐skill workers received larger compensating differentials than more skilled workers when facing unanticipated unemployment in an era without unemployment insurance. Using information from surveys of New Jersey workers conducted during the 1880s, we test the theory of compensating wage differentials. We find that workers who faced a higher probability of predictable unemployment received compensating differentials and that the size of the differential differed across industries and skill levels. With few firm‐ or industry‐specific skills, unskilled workers were less subject to “informational capture” than skilled workers who had more but less easily transferable human capital. (JEL N31)

Kooperation, Vernetzung und Erfolg von Unternehmen — die Biotechnologiebranche

Theoretischen Implikationen zufolge wird der Erfolg von Unternehmen durch die Kooperation und Netzwerkeinbindung begunstigt. Im Biotechnologiesektor ist die Kooperationsneigung der Firmen stark ausgepragt. Schatzungen des Wachstums der Firmen in Abhangigkeit von kooperations- und nichtkoopera-tionsbezogenen Faktoren zeigen einen signifikant positiven Wachstumseinfluss der Kooperationsneigung und Vernetzung. Dabei spielen Wissenschaftseinrichtungen in raumlicher Nahe der Unternehmen eine wichtige Rolle. Aus der Analyse ist zu verallgemeinern und auch fur andere Branchen zu folgern: Netzwerke entstehen unter bestimmten Bedingungen von selbst. Dennoch sollte ihre Bildung und Entwicklung unterstutzt werden, etwa durch Starkung der Leistungsfahigkeit der offentlichen Forschung und Hochschulausbildung sowie durch intensivere Kooperation und Vernetzung zwischen dem Wissenschafts- und Unternehmenssektor. Dies kann den Technologie- und Humankapitaltransfer begunstigen. Deshalb sollten derartige Netzwerkprozesse gefordert werden.

Older Workers' Adjustments to Plant Closures

This article investigates whether older workers affected by plant closures are more likely to be "discouraged" from participation in the labour force and to be "bitter" towards employers as well as whether they are less likely to report "career growth" in subsequent employment situations. The data indicated that older workers are less likely to report the poisoning effect and more likely to report the career-growth effect. In addition, post-closure training activities reduced the likelihood ofthe discour aged-worker effect for the 45-55 âge group. The respondents from the older âge groups who undertook post-closure training activities were more likely to report the poisoning effect and less likely to report the career-growth effect. In the final section, we argue that the results relate to the définition ofthe âge groups, the transferability of human capital, and the value of community support. We also highlight the implications of the results for public and institutional policies.

Die betriebliche Weiterbildung im organisatorischen Wandel / Continuous Training and Organizational Change

Zusammenfassung Der Beitrag zeigt, dass die Reorganisation von Unternehmen mit einem Wandel von einer tayloristischen Organisationsform in eine holistische erhebliche Auswirkungen auf die Weiterbildungsbereitschaft des Unternehmens hat. Die Abflachung von Hierarchien, die Partizipation der Mitarbeiter an Informations- und Entscheidungsprozessen sowie die Aufgabe der strengen funktionalen Arbeitsteilung erhöhen die Nachfrage nach qualifizierter Arbeit nicht nur dauerhaft, sondern verschieben sie auch zu Gunsten von multifunktionalem, transferierbarem Humankapital. Die zusätzlichen Qualifikationsanforderungen bewegen holistische Unternehmen, ihre Beschäftigten für die neuen Aufgaben weiterzubilden. Multifunktional ausgebildete Arbeitnehmer versichern das Unternehmen gegen negative Schocks und damit gegen Ertragsminderungen. Dies setzt jedoch voraus, dass die Beschäftigten auch nach Ablauf der Fortbildungsperiode im Unternehmen verbleiben. Unvollkommenheiten auf dem Arbeitsmarkt leisten die Gewähr, dass die Mobilität der Arbeitnehmer ex post reduziert ist und die Betriebe entgegen den Standardaussagen der Humankapitaltheorie ihre Finanzierungsbeteiligung an allgemeinen, multifunktionalen Humankapitalinvestitionen amortisieren können. Die institutionelle Ausgestaltung der Arbeitsmarktordnung in Deutschland hemmt jedoch die Finanzierungsbereitschaft der Betriebe bei allgemeinen Humankapitalinvestitionen und erweist sich zunehmend als Hindernis für den organisatorischen Wandel von tayloristischen in holistische Unternehmen.

‘Been there, done that’: international student migration and human capital transfers from the UK to Slovakia

AbstractInternational student migration remains an under‐researched field in migration studies, and this is especially true of return migration. This paper analyses students from Slovakia who have studied in the UK, both on degree courses and language/vocational courses, and have subsequently returned to their country of origin. It analyses their motivations, their acquisition of human capital in the UK, and the extent to which they have been able to realise individual welfare gains after returning to Slovakia. Their evaluations of their experiences are highly positive, with substantial numbers also reporting improvements in their jobs and incomes, even following relatively short stays abroad. The study emphasises the importance of the specific competences acquired by the students, rather than broad skill categories, or qualifications. It highlights the value attached to language competence, in particular, but also to learning, attitudinal and interpersonal competences, as well as networking. The paper concludes that there is a need to pay more attention to individual social biographies when understanding the relationship between migration and learning. At the same time, it also stresses structural parameters to individual agency, including the specific economic conditions in a transition economy, and the market value of competence in English as a world language. Copyright © 2004 John Wiley & Sons, Ltd.

Migration, return and socio‐economic change in West Africa: the role of family

AbstractThis paper seeks to analyse the influence of migrants' families on return and the transfer of financial, human and social capital by West African migrants who have lived in Europe and North America. Based on a survey of over 600 ‘elite’ and less‐skilled return migrants to Côte d'Ivoire and Ghana, as well as qualitative research with migrants remaining in London and Paris, the paper argues that families play an important role in return migration, remittances, and aspects of human, social and financial capital acquisition and investment. Using Cerase's typology of return migration, the analysis seeks to discriminate between migrants whose return decisions were affected by their families – considered as ‘return of conservatism’ – and those who made individual return decisions – considered as ‘return of innovation’. The findings reveal that the relationship between the type of return (and extent of family involvement in this decision), and the extent of financial, human and social capital transfers, varies between countries and across groups of migrants. Although those whose return is influenced by their families might be considered to have made more ‘conservative’ return decisions, this group was found to be more likely to have transferred financial capital to their home country, and more likely to have maintained social capital gained abroad after their return. They were also as likely as ‘innovative’ returnees to have promoted changes in family life or in the workplace. The paper concludes by exploring several policy implications. Copyright © 2004 John Wiley & Sons, Ltd.

Endogenous growth in a North – South framework with human capital accumulation and technology transfer

The purpose of this paper is to study the long run evolution of a world economy (divided into a North and a South) and to re-evaluate some conventional ideas regarding the inter-relation between the two economies. Here, a technologically backward South adopts the Northern technology by importing R&D-intensive intermediate inputs from the North. However the capability of its technology adoption (shown by the number of varieties of intermediate goods it uses) is constrained by its level of human capital. The results of the model suggest that (i) at the steady state, the two countries need not grow at the same rate and that the South can manipulates its own growth rate, (ii) the terms of trade (TOT) may rise, fall or remain static at the long run steady state depending on the growth rates of the two regions. A decline in the TOT of the South is associated with a higher growth rate and higher welfare (under certain conditions). This conclusion follows as a result of the incorporation of endogenous growth theory that generates increasing returns to scale through the use of different varieties of intermediate goods.

Transferable Training as a Collective Good

The potential significance of employers' collective action for economic performance is widely acknowledged, but has not been complemented with corresponding theory-guided research on the probability of collective action and the conditions for effective action. This article examines the nature of, the conditions for, and the consequences of employers' collective action on further training, a crucial component of a successful high-skill strategy for industries and nations. The collective action perspective shares the core assumptions of human-capital theory, but integrates the possibility of collective action as a solution to some of the market failures associated with investment in transferable human capital. This alternative view also predicts in what labour-market settings such action is likely to occur, building on Olson's work and theories of employers' collective action. We suggest that employers' collective action is more likely to succeed in ensuring transferability and encouraging employee investment than is the use of sanctions against employers to promote employer-financed transferable training

Who Benefits from Workers with General Skills? Countervailing Incentives in Labour Contracts

In a principal–agent model with adverse selection and moral hazard the impact of the agent's transferable human capital on incentives is analysed. It is shown that under asymmetric information the employer (principal) prefers a worker (agent) with general skills to a similarly productive worker with firm‐specific skills although the reservation utility of a worker with general (i.e. marketable) skills is higher. The principal's information costs are lower when workers have general skills than in the case where workers possess only firm‐specific human capital because of countervailing incentives. The optimal contract for workers with general skills differs from the standard screening contract in that it involves pooling.

Investissement en capital humain en fonction des sexes

Les rapports de sexe ont connu de profonds et recents changements, qui ont fait evoluer les roles parentaux feminins et masculins. Cet article traite d'un aspect important de cette question, l'investissement parental dans la poursuite des etudes des enfants et ses effets sur la reussite scolaire de ces derniers, selon le sexe du parent et de l'enfant. Cette analyse s'appuie sur les donnees d'une enquete tri-generationnelle, qui apporte une perspective temporelle, par la comparaison inter-generationnelle et les donnees retrospectives qu'elle contient. Elle montre que le transfert en capital humain tend a produire des modeles sexues, en laissant apparaitre l'existence de liens preferentiels entre peres et fils et entre meres et filles. Toutefois, les meres sont plus largement investies que les peres dans l'education des enfants des deux sexes. Cette etude permet egalement de degager trois grandes variables fortement influentes dans le succes scolaire des enfants, le niveau d'education des parents, et surtout de la mere, l'incitation aux etudes des deux parents et le rang de l'enfant dans la fratrie.

A Joint Dynamic Model of Fertility and Work of Married Women

This article estimates a dynamic model of fertility and labor supply of married women drawn from the National Longitudinal Survey of Young Women, 1968–91. It distinguishes part‐time and full‐time employment sectors, which differ by pecuniary and nonpecuniary returns and transferability of human capital. The model with unobserved heterogeneity in earning ability and preferences for children fits the data and produces reasonable forecasts of labor force participation in decisions. The estimates unpack important features of the persistence in labor market decisions, intertemporal substitution of leisure over the life cycle, and the effect of work interruptions, due to childbirth, on lifetime utility.

Educational participation across the life course Do the rich get richer?

In this article, we analyze individual factors and situational conditions under which immigrants are more or less likely to invest in host country-specific human capital. Theoretically, we root our expectations in a strand of the immigrant human capital investment model combined with a basic model of educational decisions. Using a choice experiment, we simulate a decision process among refugees in Germany and examine the determinants of investment preferences into host country-specific credentials, such as vocational education, as an alternative to an immediately available job offer. The choice experiment was introduced in the IAB-BAMF-SOEP Survey of Refugees, a representative longitudinal survey of recently arrived refugees in Germany. We find that refugees’ intentions of investing in vocational education are guided by the transferability of foreign human capital, the time horizon to reap investments, and rational cost–benefit calculations. The probability of success is influential on its own but also bolsters the relevance of costs and benefits in educational choices.