On Measuring Human Capital: A Case Study of Viet Nam

Human capital refers to the ability and efficiency of people to transform raw materials and capital into goods and services, the consensus being that these skills can be learned through the educational system. The concept of human capital, necessarily, is related to the productivity of workers. Thus, this paper develops a productivity-based single measure of human capital, taking account of different levels of education and productivity differentials across workers. Using this new measure, the paper presents empirical estimates of human capital in Viet Nam and compares the stock of human capital contributed by vocational education and general education. The paper extends its analysis by investigating the extent to which human capital is utilized at different levels of education in the labor market. It also deals with equity in human capital, particularly as contributed by vocational education, and measures this equity across income quintiles and various socioeconomic and demographic groups in Viet Nam

The Role of Demography and Markets in Determining Deforestation Rates Near Ranomafana National Park, Madagascar

The highland forests of Madagascar are home to some of the world's most unique and diverse flora and fauna and to some of its poorest people. This juxtaposition of poverty and biodiversity is continually reinforced by rapid population growth, which results in increasing pressure on the remaining forest habitat in the highland region, and the biodiversity therein. Here we derive a mathematical expression for the subsistence of households to assess the role of markets and household demography on deforestation near Ranomafana National Park. In villages closest to urban rice markets, households were likely to clear less land than our model predicted, presumably because they were purchasing food at market. This effect was offset by the large number of migrant households who cleared significantly more land between 1989–2003 than did residents throughout the region. Deforestation by migrant households typically occurred after a mean time lag of 9 years. Analyses suggest that while local conservation efforts in Madagascar have been successful at reducing the footprint of individual households, large-scale conservation must rely on policies that can reduce the establishment of new households in remaining forested areas

Robust tests for time-invariant individual heterogeneity versus dynamic state dependence

We derive tests for persistent effects in a general linear dynamic panel data context. Two sources of persistent behavior are considered: time-invariant unobserved factors (captured by an individual random effect) and dynamic persistence or “state dependence” (captured by autoregressive behavior). We will use a maximum likelihood framework to derive a family of tests that help researchers learn whether persistence is due to individual heterogeneity, dynamic effect, or both. The proposed tests have power only in the direction they are designed to perform, that is, they are locally robust to the presence of alternative sources of persistence, and consequently, are able to identify which source of persistence is active. A Monte Carlo experiment is implemented to explore the finite sample performance of the proposed procedures. The tests are applied to a panel data series of real GDP growth for the period 1960–2005

A Note on Human Capital and the Feldstein-Horioka Puzzle

In this paper we reexamine the Feldstein-Horioka finding of limited international capital mobility by using a broader view (i.e., including human capital) of investment and saving. We find that the Feldstein-Horioka result is impervious to this change

Optimal Management with Potential Regime Shifts

We analyze how the threat of a potential future regime shift affects optimal management. We use a simple general growth model to analyze four cases that involve combinations of stock collapse versus changes in system dynamics, and exogenous versus endogenous probabilities of regime shift. Prior work has focused on stock collapse with endogenous probabilities and reaches ambiguous conclusions about the effect of potential regime shift on optimal management. We show that all other cases yield unambiguous results. In particular, with endogenous probability of regime shift that affects system dynamics the potential for regime shift causes optimal management to become precautionary

Innovation and Imitation at Various Stages of Development

A simple model of imitation and innovation is developed to explain a complicated picture of relative productivity growth in different countries. The model makes difference between global and local innovations and does not assume that a country always imitates the most advanced technology. It is shown that there are three types of stationary states, where only imitation, only innovation or a mixed policy prevails. We demonstrate how one can find the stationary states and check their stability for a broad class of imitation-innovation cost functions. Using World Bank statistical data for the period of 1980-1999, we reveal the dependence of innovation and imitation costs on GDP per capita measured in PPP and on an indicator of investment risk. An appropriate choice of two adjustment parameters of the model gives a possibility to generate trajectories of more than 80 countries and, for most of them, get qualitatively correct pictures of their movement. It turns out that three groups of countries behave differently, and there is a tendency to converge inside each group. Increase in institutional quality get countries out of underdevelopment traps, from the imitation area to a better steady state where local innovations and imitations are jointly used. All countries with high quality of institutions are moving toward the area where pure innovation policy prevails