Measuring Human Capital Abraham, Katharine G.; Mallatt, Justine
The Journal of economic perspectives,
07/2022, Volume:
36, Issue:
3
Journal Article
Peer reviewed
Open access
We review the existing literature on the measurement of human capital. Broadly speaking, economists have proposed three approaches to constructing human capital measures—the indicator approach, the ...cost approach, and the income approach. Studies employing the indicator approach have used single measures such as average years of schooling or indexes of multiple measures. The cost approach values human capital investments based on spending. The income approach values human capital investments by looking forward to the increment to expected future earnings they produce. The latter two approaches have the significant advantage of consistency with national income accounting practices and measures of other types of capital. Measures based on the income approach typically yield far larger estimates of the value of human capital than measures based on the cost approach. We outline possible reasons for this discrepancy and show how changes in assumptions can reconcile estimates based on the two approaches.
Human capital theory has recently expanded to include multilevel analysis by conceptualizing the unit-level human capital resource. At the same time, the value of complementary resources has been ...theorized to provide competitive advantages for firms. Thus, human capital at one level in the firm may impact the performance of human capital at another level in the firm if the resources are complementary. Through a multilevel analysis performed using hierarchical linear modeling of Major League Baseball data, we show that the relationship between individual human capital and individual performance is impacted by complementary functional and managerial unit-level human capital resources. As such, this paper contributes to the understanding of how complementary multilevel human capital resources relate to performance outcomes. Implications of our findings include support for the notion that more is not always better when it comes to high-quality human capital and that unit-level human capital plays an important role in performance of individual-level human capital.
Capitalists in the Twenty-First Century Smith, Matthew; Yagan, Danny; Zidar, Owen ...
The Quarterly journal of economics,
11/2019, Volume:
134, Issue:
4
Journal Article
Peer reviewed
Open access
Abstract
How important is human capital at the top of the U.S. income distribution? A primary source of top income is private “pass-through” business profit, which can include entrepreneurial labor ...income for tax reasons. This article asks whether top pass-through profit mostly reflects human capital, defined as all inalienable factors embodied in business owners, rather than financial capital. Tax data linking 11 million firms to their owners show that top pass-through profit accrues to working-age owners of closely held mid-market firms in skill-intensive industries. Pass-through profit falls by three-quarters after owner retirement or premature death. Classifying three-quarters of pass-through profit as human capital income, we find that the typical top earner derives most of her income from human capital, not financial capital. Growth in pass-through profit is explained by both rising productivity and a rising share of value added accruing to owners.
•We examine the effect of human capital on energy consumption for a panel of OECD economies over the period 1965–2014.•Our results suggest that human capital reduces aggregate energy consumption by ...15.36%.•We find that human capital is associated with a 17.33% decrease in dirty energy consumption and an 85.54% increase in clean energy consumption.•Our findings emphasize the social benefits of investing in human capital
We examine the effect of human capital on energy consumption for a panel of OECD economies over the period 1965–2014. Our preferred results, which account for cross-sectional dependence and structural breaks, suggest that a one standard deviation increase in human capital reduces aggregate energy consumption by 15.36%. When we distinguish between clean and dirty energy consumption, we find that human capital generates significant positive externalities for the environment. Specifically, we find that a one standard deviation increase in human capital is associated with a 17.33% decrease in dirty energy consumption and an 85.54% increase in clean energy consumption. Our findings reinforce the social benefits of investing in human capital and suggest a promising avenue for energy conservation without impeding economic growth.
This study analyzes the influence of financial technologies, digitalization, institutional quality, and human capital on natural resources rent during 2002–2020 in selected OECD economies. It ...identifies the diverse impact of selected explanatory variables at three ranges of quantiles (lower, middle, and higher) through the method of moments quantile regression (MMQR) along with the long-run coefficients via fully modified ordinary least squares (FM-OLS), fixed effects OLS, and dynamic ordinary least squares (OLS) regression, respectively. From the initial results, it is inferred that there exists a cross-sectional dependence, heterogeneity in the slope coefficients, panel cointegration, and stationarity in the data. The results show that financial technologies and digitalization reduce the dependency on natural resources. Likewise, human development and institutional quality lead to lower natural resources dependency; however, their marginal impact varies across different quantiles. The results show that financial technologies and digitalization effects are stronger at higher quantiles. Likewise, the influence of digitalization on natural resource rent is highly significant and negative at the highest quantile. These results offer valuable policy recommendations.
•Methods of Moments Quantile applied to address non-linearity.•Financial technologies and digitalization reduce natural resources dependency.•Institutional governance and human capital impede natural resources rent.•Influence of above variables substantially varied across lower, medium, and higher quantiles.
In order to preserve innovation, knowledge development and diffusion, as well as the transfer of new technologies, the emergence of University Start-Ups (USU) and their survival as a particular ...dimension of performance represents a relevant research topic. As USU generally have scarce initial resources, the human capital of their founders is one of their main business assets. Although the survival of such firms is supposed to be heavily dependent on the human capital characteristics of their founders, this has not received enough attention in existing research. In this paper we investigate the contribution of founders’ specific human capital characteristics to the survival of USU, building on Gimeno et al. (Adm Sci Q 42:750–783,
1997
) threshold model of entrepreneurial exit. We divide USU founders’ specific human capital into three components (entrepreneurship, industry and university) in order to better understand its impact on firm survival. Our theoretical model is empirically tested on a unique sample of Catalan USU through a logistic regression analysis. Coherently with our theoretical reasoning, the results show that industry human capital negatively affect USU survival, while university human capital and entrepreneurship human capital enhance the likelihood of USU survival.
The false hope that economic development would lead to a decrease in fossil sources’ energy consumption can be an obstacle to fighting global warming. Is it realistic to expect that more knowledge ...will lead public policymakers to take more decisive action to mitigate climate change’s adverse effects? This research attempts to answer both premises using data for developed countries with high human capital levels: 27-member countries of the Organization for Economic Cooperation and Development-OECD during 1980–2015. Access to energy and that it is non-polluting is raised as a goal of the Sustainable Development Goals. We combine linear and non-linear models: we specifically employ threshold regressions and second-generation cointegration techniques, FMOLS, and causality. Our results are disappointing for the first premise: economic development does not reduce energy consumption from fossil sources. However, human capital does decrease the consumption of non-renewable energy. In order to capture current trends in economies, we include the globalization index, the urbanization rate, and services. The results of the cointegration tests suggest the existence of a long-term relationship between the variables. Our results indicate that the human capital index and globalization are the last hope to promote the transition to a more sustainable energy matrix in developed countries.
•We answer the question if development and knowledge will reduce the consumption of polluting energy.•We use threshold regression and second-generation cointegration techniques.•Development does not decrease the consumption of non-polluting energy, but human capital does.•We assess the role of globalization, urbanization and services on non-renewable energy consumption.
We examine the channels through which a randomized early childhood intervention in Colombia led to significant gains in cognitive and socio-emotional skills among a sample of disadvantaged children ...aged 12 to 24 months at baseline. We estimate the determinants of parents’ material and time investments in these children and evaluate the impact of the treatment on such investments. We then estimate the production functions for cognitive and socio-emotional skills. The effects of the program can be explained by increases in parental investments, emphasizing the importance of parenting interventions at an early age.
One means by which the state reinforces inequality is by imposing administrative burdens that loom larger for citizens with lower levels of human capital. Integrating insights from various ...disciplines, this article focuses on one aspect of human capital: cognitive resources. The authors outline a model that explains how burdens and cognitive resources, especially executive functioning, interrelate. The article then presents illustrative examples, highlighting three common life factors—scarcity, health problems, and age‐related cognitive decline. These factors create a human capital catch‐22, increasing people's likelihood of needing state assistance while simultaneously undermining the cognitive resources required to negotiate the burdens they encounter while seeking such assistance. The result is to reduce access to state benefits and increase inequality. The article concludes by calling for scholars of behavioral public administration and public administration more generally to incorporate more attention to human capital into their research.
This paper uses 2000 Census data to estimate the relationship of agglomeration and proximity to human capital to wages. The paper takes a geographic approach, and focuses on the attenuation of ...agglomeration and human capital effects. Differencing and instrumental variable methods are employed to address endogeneity in the wage–agglomeration relationship and also to deal with measurement error in our agglomeration and human capital variables. Three key results are obtained. First, the spatial concentration of employment within five miles is positively related to wage. Second, the benefits of spatial concentration are driven by proximity to college educated workers, an instance of human capital spillovers. Third, these effects attenuate sharply with distance.
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