Human Capital Externalities and Private Returns to Education in Kenya

We use survey data of full-time workers in Kenya to analyse the effect of human capital externalities on earnings and private returns to education. The estimation results show that education human capital generally associates with positive externalities, indicating that an increase in education benefits all workers. However, the results reveal that men benefit more from women's education than women do from men's schooling. The effects of human capital externalities on private returns to schooling are shown to vary substantially between rural and urban areas and across primary and higher levels of education.

Local Human Capital Externalities and Wages at the Firm Level: The Case of Italian Manufacturing

We use a unique firm-level data set merging administrative information on average wages paid by firms by skill level (blue collars and white collars), Population Census information on the local stock of human capital available to firms and survey information on firm characteristics to investigate the existence and magnitude of local human capital externalities in Italian Manufacturing. The latter represents an interesting case study due to the prevalence of small family business and a technological lag with respect to the US, to which most evidence supporting local human capital spillovers refers. Our estimates show that in Italy, like in the US, firms located in geographical areas with a higher stock of human capital pay higher wages. This evidence is robust to many variants of the econometric specification and to addressing potential endogeneity issues using instrumental variables estimation and instruments based on the lagged expansion of the Italian higher education system and the lagged demographic structure.firm, local human capital externalities, Italy, manufacturing, wages

Positive externalities of congestion, human capital, and socio-economic factors: A case study of chronic illness in Japan.

This paper explores, using Japanese panel data for the years 1988-2002, how externalities from congestion and human capital influence deaths caused by chronic illnesses. Major findings through fixed effects 2SLS estimation were as follows: (1) the number of deaths were smaller in more densely-populated areas, and this tendency was more distinct for males; (2) higher human capital correlated with a decreased number of deaths, with the effect being greater in females than in males. These findings suggest that human capital and positive externalities stemming from congestion make a contribution to improving lifestyle, which is affected differently by socio-economic circumstance in males and females.population density, education, chronic illness

Social services, human capital, and technical efficiency of smallholders in Burkina Faso:

This study applies regression analysis as well as a non-parametric method to survey data from Burkina Faso to analyze the role of human capital in explaining technical efficiency in smallholder agricultural production. Exploiting the panel nature of the data and explicitly treating human capital inputs as endogenous, a two-stage estimation method is used for the analysis of determinants of data envelopment analysis (DEA) technical efficiency scores in a double-bootstrap procedure. Findings suggest that the impact of human capital on technical efficiency differs strongly by gender. Strong positive returns exist for education of females, whereas male education is associated with higher inefficiency. Body mass index of adult females also positively relates to technical efficiency. At the community level, presence of a clinic, connection to the electrical grid, presence of a secondary school, and year-round accessibility of the community are found to be vital for human capital formation.Human capital, non-parametrics, public services, Smallholders,

Human Capital in the Sub Saharan African Countries: Productivity and the Policy Implications

The paper investigates the contribution of Human capital to productivity in SSA countries. Human capital in this paper was viewed concurrently from the perspective of enrolment and graduates of higher education. While adopts panel data of 30 countries for 1980 to 2015 to estimate the paper’s models, a systematic procedure involving fixed effect Least Square Dummy Variable (LSDV) and system Generalized Methods of Moments (GMM) were used to test the hypothesis in this paper. Findings from this paper indicates that the impacts of higher education (both HEE and HEG) on TFP appear mixed. Higher education human capital proxied by enrollment and graduates consistently shows negative and positive signs in both methods of estimation. The human capital effects on TFP among the SSA countries flow from positive to negative as the regression moves from HEE to HEG. Quality HEG is recommended so that innovation and skills acquisition add value to SSA higher education. We can also conclude that the level of investment in SSA higher education is grossly inadequate. This implies that these countries’ higher education sectors suffer from inadequate human capital

The Role of Human Capital and Technological Interdependence in Growth and Convergence Processes: International Evidence

This paper develops a bisectorial growth model with physical and human capital accumulation. Each sector is characterized by a different technology involving different human capital parameters. The model includes human capital externalities together with technological interdependence between economies. It leads to a spatial autoregressive reduced form for the real income per worker at steady state. The structural parameters of the model are recovered and evidence of the insignificance of human capital in explaining per capita growth, that is the human capital puzzle, is reconsidered. In fact, the parameter related to human capital in the consumption good sector is low which is consistent with evidence presented in the growth accounting framework. In contrast it is indeed higher in the education sector. Our model leads to spatial econometric specifications which are estimated on a sample of 89 countries over the period 1960-1995 using maximum likelihood as well as Bayesian estimation methods, which are robust versus outliers and heteroskedasticity. This model yields a spatially augmented convergence equation characterized by parameter heterogeneity. A locally linear spatial autoregressive specification is then estimated providing a different convergence speed estimate for each country of the sample.Conditional convergence, technological interdependence, spatial autocorrelation, parameter heterogeneity, locally linear estimation

The causal effect of education on aggregate income

Empirical studies assume that the macro Mincer return on schooling is con- stant across countries. Using a large sample of countries this paper shows that countries with a better quality of education have on average relatively higher macro Mincer coeficients. As rich countries have on average better educational quality, differences in human capital between countries are larger than has been typically assumed in the development accounting literature. Consequently, factor accumulation explains a considerably larger share of income differences across countries than what is usually found.Human capital; income growth; GMM estimation; development accounting.

Human capital, productivity, and labor allocation in rural Pakistan

This paper investigates whether human capital affects the productivity and labor allocation of rural households in four districts of Pakistan. The investigation shows that households with better-educated males earn higher off-farm income and divert labor resources away from farm activities toward nonfarm work. Education has no significant effect on productivity in crop and livestock production. The effect of human capital on household incomes is partly realized through the reallocation of labor from low-productivity activities to nonfarm work. Female education and nutrition do not affect productivity and labor allocation in any systematic fashion, a finding that is consistent with the marginal role women play in market-oriented activities in Pakistan. As a by-product, our estimation approach also tests the existence of perfect labor and factor markets; the hypothesis that such markets exist is strongly rejected.employment ,Gender ,Female labor ,Income distribution ,Labor Gender issues. ,Labor productivity. ,Pakistan. ,Nutrition ,

Is Portuguese regional growth schumpeterian? An empirical assessment of the relation between schooling, firm destruction and firm productivity

A study focusing Portuguese textile firms dynamics during the eighties and nineties (Teixeira, 2002; Teixeira and Vieira, 2004) demonstrated that plants which tended to hire workers with higher levels of human capital (education) were those that, on average, presented a lower probability of survival. Macro-level evidence on the relation between human capital, per capita income and productivity seems to be at odds with the micro evidence reported. Specifically, at the economy level the bulk of studies found a positive relation between human capital accumulation and productivity dynamics (Michie et al, 2002; Teixeira and Fortuna, 2003; Maudos et al, 2003) which, at first glance, seems hard to match with the micro-level evidence suggesting that the accumulation of human capital is associated with higher failure rates on firm’s behalf. The potential explanation for this may be related with the fact that firms can be positioned into one of the two possible states – low productivity and low risk or high productivity and high risk. In order for a low productivity-low risk firm to become high productivity-high risk firm it has to hire top educated workers. Successful high productivity-high risk firms, i.e, those that survive, are the ‘engine of growth’. This may explain that regions, which have higher levels of human capital, be those that, in the medium term, have higher levels of per capita income and higher firm failure rates. This association of higher per capita income/productivity levels and higher firm destruction rates translates the schumpeterian issue of creative destruction (Schumpeter, 1942). In the present paper we try to validate this theoretical explanation using empirical evidence at the regional level. Based on panel data relative to 27 Portuguese regions (NUTIII) over the period 1992-1999, we estimate an econometric model of the relation between human capital, firm productivity and firm failure rates. Estimation results suggest important policy implications, namely that policy measures involving schooling incentives, i.e., human capital supply side focused policies, should be replaced by more human capital demand side focused policies aiming to easy bankruptcy processes. Keywords: Schooling, Productivity, Firm Survival, Regions

Proceedings of the Conference on Human and Economic Resources

The purpose of this paper is to examine the returns to individually acquired education in Turkey. In contrast to the traditional neo-classical growth theory models, technological progress is embedded within the new endogenous growth models emphasising the endogenous determination of growth process. Thus, human capital stock is incorporated as an endogenous determinant of growth rate into the model that is highly associating the human capital accumulation with the innovative capacity and productivity. With the development of human capital theory, the educational level of the population as one of the key determinants in economic growth, is considered to be affected by the returns to education. The key relationship for the estimation of returns to education was derived by Mincer (Mincer, 1974). Since then, the topic has become centre of focus, and a large number of studies have estimated returns to education. One of the most comprehensive surveys by Psacharopoulos covers the cross – country returns to education estimations for 60 countries, reveals that the developing countries possessed the highest return to an additional year of schooling (1994). Recent country specific studies, on the other hand, while providing evidence on the decreasing returns to education in Norway (Haegeland et. al. 1999), and Austria ( ), empirical findings for China (Heckman & Li, 2003), and Italy (Brunello et. al., 2000) suggest increasing returns to education. Furthermore, returns to education estimations reveal heterogenous results varying accordingly with the degree programmes and gender in Britain (Sloane & O’Leary, 2004), and West Germany (Lauer & Steiner, 2000). Despite the huge literature on the estimation of returns to education in terms of both cross – country and country specific analysis, studies concerning Turkish case remain limited (Tansel, 1994, 1999). This paper aims to make an update contribution to the literature in Turkey. Role of the educational level (primary, secondary, and higher education) in explaining earnings dispersion is analysed by estimating standard Mincerian equation, and using a national level household budget survey data. Estimating earnings equations for 1994 and 2003, preliminary findings demonstrate that returns to education have been instable and changing across the different sectors of the economy. Even though the education has been an important determinant of wage dispersion in Turkey, the findings reveal substantial heterogeneity in returns to different educational levels.returns to education, turkey, developing countries