Human capital and productivity

This paper surveys the empirical literature on human capital and productivity and summarizes the results of my own work on the subject. On balance, the available evidence suggests that investment in education has a positive, significant and sizable effect on productivity growth. According to my estimates, moreover, the social returns to investment in human capital are higher than those on physical capital in most EU countries and in many regions of Spain.

Location Determinants of New Firms: Does Skill Level of Human Capital Really Matter?

This paper is about the role played by stock of human capital on location decisions of new manufacturing plants. We analyse the effect of several skill levels (from basic school to PhD) on decisions about the location of plants in various industries and, therefore, of different technological levels. We also test whether spatial aggregation level biases the results and determine the most appropriate areas to be considered in analyses of these phenomena. Our main statistical source is the Register of Manufacturing Establishments of Catalonia (REIC), which has plant-level microdata on the locations of new manufacturing plants. Keywords: agglomeration economies, industrial location, human capital, count-data models, spatial econometrics.

A correlation sensitivity analysis of non-life underwriting risk in solvency capital requirement estimation

This paper analyses the impact of using different correlation assumptions between lines of business when estimating the risk-based capital reserve, the Solvency Capital Requirement (SCR), under Solvency II regulations. A case study is presented and the SCR is calculated according to the Standard Model approach. Alternatively, the requirement is then calculated using an Internal Model based on a Monte Carlo simulation of the net underwriting result at a one-year horizon, with copulas being used to model the dependence between lines of business. To address the impact of these model assumptions on the SCR we conduct a sensitivity analysis. We examine changes in the correlation matrix between lines of business and address the choice of copulas. Drawing on aggregate historical data from the Spanish non-life insurance market between 2000 and 2009, we conclude that modifications of the correlation and dependence assumptions have a significant impact on SCR estimation.

Vintage capital growth theory: three breakthroughs

Vintage capital growth models have been at the heart of growth theory in the 60s. This research line collapsed in the late 60s with the so-called embodiment controversy and the technical sophisitication of the vintage models. This paper analyzes the astonishing revival of this literature in the 90s. In particular, it outlines three methodological breakthroughs explaining this resurgence: a growth accounting revolution, taking advantage of the availability of new time series, an optimal control revolution allowing to safely study vintage capital optimal growth models, and a vintage human capital revolution, along with the rise of economic demography, accounting for the vintage structure of human capital similarly to physical capital age structuring. The related literature is surveyed.

A New open economy macroeconomic model with endogenous portfolio diversification and firms entry

This paper provides a new benchmark for the analysis of the international diversi…cation puzzle in a tractable new open economy macroeconomic model. Building on Cole and Obstfeld (1991) and Heathcote and Perri (2009), this model speci…es an equilibrium model of perfect risk sharing in incomplete markets, with endogenous portfolios and number of varieties. Equity home bias may not be a puzzle but a perfectly optimal allocation for hedging risk. In contrast to previous work, the model shows that: (i) optimal international portfolio diversi…cation is driven by home bias in capital goods, independently of home bias in consumption, and by the share of income accruing to labour. The model explains reasonably well the recent patterns of portfolio allocations in developed economies; and (ii) optimal portfolio shares are independent of market dynamics.

How central and connected am I in my family? Bridging and bonding social capital in family configurations of young adults with psychiatric disorders

AIMS: This article explores the structures of relational resources that individuals with psychiatric disorders get from their family configurations using the concept of social capital. METHODS: The research is based on a sample of 54 individuals with psychiatric disorders and behavioural problems, and a comparison sample of 54 individuals without a clinical record matched to the clinical respondents for age and sex. Standard measures of social capital from social network methods are applied on family configurations of individuals from both samples. Differences are tested by variance analysis. RESULTS: Structures of family resources available to individuals with psychiatric disorders are distinct. Individuals with psychiatric disorders perceive themselves as less central in their family configurations and less connected to their family members. Their significant family members are perceived as less connected with each other. As a whole, their family configurations are smaller and do not include spouses or partners. Therefore bridging and bonding social capitals are not readily available for them. CONCLUSION: As family configurations of individuals with psychiatric disorders provide fewer relational resources than other families, they are not able to deal with social integration of individuals with psychiatric disorders on their own.

Plasticity in sex allocation in the plant Mercurialis annua is greater for hermaphrodites sampled from dimorphic than from monomorphic populations.

Plants are notoriously variable in gender, ranging in sex allocation from purely male through hermaphrodite to purely female. This variation can have both a genetic and an adaptive plastic component. In gynodioecious species, where females co-occur with hermaphrodites, hermaphrodites tend to shift their allocation towards greater maleness when growing under low-resource conditions, either as a result of hermaphrodites shifting away from an expensive female function, or because of enhanced siring advantages in the presence of females. Similarly, in the androdioecious plant Mercurialis annua, where hermaphrodites co-exist with males, hermaphrodites also tend to enhance their relative male allocation under low-resource conditions. Here, we ask whether this response differs between hermaphrodites that have been evolving in the presence of males, in a situation analogous to that supposed for gynodioecious populations, vs. those that have been evolving in their absence. We grew hermaphrodites of M. annua from populations in which males were either present or absent under different levels of nutrient availability and compared their reaction norms. We found that, overall, hermaphrodites from populations with males tended to be more female than those from populations lacking males. Importantly, hermaphrodites' investment in pollen and seed production was more plastic when they came from populations with males than without them, reducing their pollen production at low resource availability and increasing their seed production at high resource availability. These results are consistent with the hypothesis that plasticity in sex allocation is enhanced in hermaphrodites that have likely been exposed to variation in mating opportunities due to fluctuations in the frequency of co-occurring males.

Solvency Capital estimation and Risk Measures

This paper examines why a financial entity’s solvency capital estimation might be underestimated if the total amount required is obtained directly from a risk measurement. Using Monte Carlo simulation we show that, in some instances, a common risk measure such as Value-at-Risk is not subadditive when certain dependence structures are considered. Higher risk evaluations are obtained for independence between random variables than those obtained in the case of comonotonicity. The paper stresses, therefore, the relationship between dependence structures and capital estimation.

Productivity and human capital: a business-level analysis

This paper aims to analyse the impact of human capital on business productivity, focusing the analysis on the possible effect of the complementarity that exists between human capital and new production technologies, particularly advanced manufacturing technologies (AMTs) for the specific case of small and medium enterprises (SMEs) in Catalonia. Additionally, following the theory of skill-biased technological change, the paper analyses whether technological change produces bias exclusively in the skills required for managers, or whether the bias extends to the skills required of production staff. With this objective, we have compared the possible existence of complementarity between AMTs and the level of human capital for different occupational groups. The results confirm the complementary relationship between human capital and new production technologies. The results by occupational group confirm that to maximise the productivity of new technologies, skilled staff are needed both in management and production, with managers and professionals as well as skilled operatives playing a vital role. Keywords: human capital, process technologies, complementarity, business productivity. (JEL D24, J24, O30).

Wage effects from changes in local human capital in Britain

This paper examines the impact of local human capital on individuals’ wages through external effects. Employing wage regressions, it is found that changes in individuals’ wages are positively associated with changes in the shares of high-paid occupation workers in the British travel-to-work-areas for the late 1990s. I examine this positive association for different occupational groups (defined by pay) in order to disentangle between production function and consumer demand driven theoretical explanations. The wage effect is found to be stronger and significant for the bottom-paid occupational quintile compared to the middle-paid ones, and using also sectoral controls the paper argues to provide evidence for the existence of consumer demand effects.

HSS (F)2004 04/04 - Revised Cost of Capital Rate in Fees and Charges Recovery Policy (PDF 51 KB)

HSS (F)2004 04/04 - Revised Cost of Capital Rate in Fees and Charges Recovery Policy

Testing kin selection with sex allocation data in eusocial hymenoptera

Sex allocation data in eusocial Hymenoptera (ants, bees and wasps) provide an excellent opportunity to assess the effectiveness of kin selection, because queens and workers differ in their relatedness to females and males. The first studies on sex allocation in eusocial Hymenoptera compared population sex investment ratios across species. Female-biased investment in monogyne (= with single-queen colonies) populations of ants suggested that workers manipulate sex allocation according to their higher relatedness to females than males (relatedness asymmetry). However, several factors may confound these comparisons across species. First, variation in relatedness asymmetry is typically associated with major changes in breeding system and life history that may also affect sex allocation. Secondly, the relative cost of females and males is difficult to estimate across sexually dimorphic taxa, such as ants. Thirdly, each species in the comparison may not represent an independent data point, because of phylogenetic relationships among species. Recently, stronger evidence that workers control sex allocation has been provided by intraspecific studies of sex ratio variation across colonies. In several species of eusocial Hymenoptera, colonies with high relatedness asymmetry produced mostly females, in contrast to colonies with low relatedness asymmetry which produced mostly males. Additional signs of worker control were found by investigating proximate mechanisms of sex ratio manipulation in ants and wasps. However, worker control is not always effective, and further manipulative experiments will be needed to disentangle the multiple evolutionary factors and processes affecting sex allocation in eusocial Hymenoptera.