Life expectancy and human capital investment: the arrival of AIDS treatment in Brazil

This paper provides microevidence on the relationship between life expectancy and educational investment decisions. Human capital theory predicts an increase in life expectancy should lead to an augmenting in schooling investment. This paper uses an unique data set on AIDS patients among Brazilian inhabitants in an attempt to estimate the impact of the arrival of Antiretroviral therapy (ART) on educational outcomes. The availability of ART offsets the negative relationship between vertical HIV-transmission and schooling, around 68% and 57% for elementary and high school completion, respectively. Robustness tests indicate the results are not driven by convergence effects.

Chronic disease burden and human capital investment: evidence from the chagas disease campaign in Brazil

We investigate the effects of augmented life expectancy and health improvements on human capital investment, labor supply and fertility decisions. Our main motivation is the prediction of human capital theory that a longer and healthier life encourages educational investment and female labor force participation, while discouraging fertility. To assess the magnitude of these effects, we explore a national campaign against Chagas disease in Brazil as an exogenous source of adult mortality decline and improvement in health conditions. We show that, relative to non-endemic areas, previously endemic regions saw higher increases in educational investment, measured by literacy, school attendance and years of schooling, following the campaign. Additionally, we find that labor force participation increased in high prevalence areas relative to low prevalence ones. Furthermore, we estimate a substantially higher effect on female labor force participation relative to male, suggesting that longevity gains and health improvements affected women's incentives to work, encouraging women to join the labor force. We do not find significant effects on fertility decisions.

Children and economic development: Family size, gender preferences and human capital formation - theory and Indian cases

In the light of Gary Becker's economic theory of the family, considers how economic cost and benefit factors can influence the size of families that parents decide to have. Some support for the importance of such factors is found from results of structured interviews with wives in Kondh-dominated villages in western Orissa. These results are at variance with the hypothesis of Malthus about population growth. Factors that may alter the optimal family size as development proceeds are discussed. It is found in our sampling that, on the whole, there is a preference for daughters rather than sons although this is not as strong in the Kondh-dominated villages as in poor villages in the Santal tribal belt of West Bengal. While in the Kondh-dominated villages some discrimination in access to education in favour of boys compared to girls is present, little such or no such discrimination occurs in relation to access to food and medical attention. In the villages surveyed in the West Bengal Santal tribal belt, discrimination in favour of boys is more pronounced than in the Kondh-dominated area in Orissa. While economic considerations help to explain gender discrimination between boys and girls, we find that social and cultural factors also play a major role. Parents in a similar economic situation seem to display substantially different patterns of gender discrimination between children depending on their social and cultural content. It seems that the extent to which economic theories of the family explain family preferences and behaviour depend significantly on the social and cultural context in which they are to be applied.

Indentifying human capital externalities: Theory with an application to US cities

The identification of aggregate human capital externalities is still not fully understood. The existing (Mincerian) approach confounds positive externalities with wage changes due to a downward sloping demand curve for human capital. As a result, it yields positive externalities even when wages equal marginal social products. We propose an approach that identifies human capital externalities whether or not aggregate demand for human capital slopes downward. Another advantage of our approach is that it does not require estimates of the individual return to human capital. Applications to US cities and states between 1970 and 1990 yield no evidence of significant average -schooling externalities.

Developing and leveraging human capital resource to promote service quality:testing a theory of performance

Grounded in Vroom’s motivational framework of performance, we examine the interactive influence of collective human capital (ability) and aggregated service orientation (motivation) on the cross-level relationship between high-performance work systems (HPWS) and individual-level service quality. Results of hierarchical linear modeling (HLM) revealed that HPWS related to collective human capital and aggregated service orientation, which in turn related to individual-level service quality. Furthermore, both HLM and ordinary least squares regression analyses revealed a cross-level interaction effect of collective human capital and aggregated service orientation such that high levels of collective human capital and aggregated service orientation influence individual-level service quality.

A model of migrants' remittances with human capital investment and intrafamilial transfers

This study analyzes data on migrants' remittances using a two-period theory of intergenerational transfers based on an informal, intrafamilial loan arrangement using weak altruism, a behavior between strong altruism and pure self-interest. The model provides an integrated theory of migrants' remittances, human capital investment decisions, and intrafamilial transfers applicable to low-income countries with no official pension schemes and imperfect capital markets. Propositions, derived from the theory, are tested, re-analyzing original survey data on remittances of Pacific island migrants in Sydney. When weak altruism and strong altruism yield opposite predictions, the econometric results tend to confirm the former hypothesis and invalidate the latter.

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).

Human capital and externalities in cities

We combine growth theory with US Census data on individual schooling and wages to estimate the aggregate return to human capital and human capital externalities in cities. Our estimates imply that a one-year increase in average schooling in cities increases their aggregate labor productivity by 8 to 11 percent. We find no evidence for aggregate human capital externalities in cities however althoughwe use three different approaches. Our main theoretical contribution is to show how human capital externalities can be identified (non-parametically) even if workers with different levels of human capital are imperfect substitutes in production.

Does human capital stimulate investment in physical capital?: Evidence from a cost system framework

The direct effect of human capital on economic growth has been widely analysed in the economic literature. This paper, however, focuses on its indirect effect as a stimulus for private investment in physical capital. The methodological framework used is the duality theory, estimating a cost system aggregated with human capital. Empirical evidence is given for Spain for the period 1980-2000. We provide evidence on the indirect effect of human capital in making private capital investment more attractive. Among the main explanations forthis process, we observe that higher worker skill levels enable higher returns to be extracted from investment in physical capital.

The Spatial Distribution of Human Capital: Can It Really Be Explained by Regional Differences in Market Access?

This paper tests the robustness of estimates of market access impact on regional variability in human capital, as previously derived in the NEG literature. Our hypothesis is that these estimates of the coefficient of market access, in fact, capture the effects of regional differences in the industrial mix and the spatial dependence in the distribution of human capital. Results for the Spanish provinces indicate that the estimated impact of market access vanishes and becomes non-significant once these two elements are included in the empirical analysis.

Does human capital stimulate investment in physical capital? Evidence from a cost system framework

The direct effect of human capital on economic growth has been widely analysed in the economic literature. This paper, however, focuses on its indirect effect as a stimulus for private investment in physical capital. The methodological framework used is the duality theory, estimating a cost system aggregated with human capital. Empirical evidence is given for Spain for the period 1980-2000. We provide evidence on the indirect effect of human capital in making private capital investment more attractive. Among the main explanations for this process, we observe that higher worker skill levels enable higher returns to be extracted from investment in physical capital.

Natural resources, redistribution and Human capital formation

How do resource booms affect human capital accumulation? We exploit time and spatial variation generated by the commodity boom across local governments in Peru to measure the effect of natural resources on human capital formation. We explore the effect of both mining production and tax revenues on test scores, finding a substantial and statistically significant effect for the latter. Transfers to local governments from mining tax revenues are linked to an increase in math test scores of around 0.23 standard deviations. We find that the hiring of permanent teachers as well as the increases in parental employment and improvements in health outcomes of adults and children are plausible mechanisms for such large effect on learning. These findings suggest that redistributive policies could facilitate the accumulation of human capital in resource abundant developing countries as a way to avoid the natural resources curse.

Income Ranking and convergence with physical and human capital and income equality

This paper presents an overlapping generations model with physical and human capital and income inequality. It shows that inequality impedes output growth by directly harming capital accumulation and indirectly raising the ratio of physical to human capital. The convergence speed of output growth equals the lower of the convergence speeds of the relative capital ratio and inequality, and varies with initial states. Among economies with the same balanced growth rate but different initial income levels, the ranking of income can switch in favor of those starting from low inequality and a low ratio of physical to human capital, particularly if the growth rate converges slowly. (C) 2004 Elsevier B.V. All rights reserved.

Second-best public debt with human capital externalities

This paper studies optinnal public debt in a dynastic model with human capital externalities that cause human capital investment (fertility) to be below (above) its socially optimal level. By reducing fertility and raising human capital investment, the optimal debt can exceed 10% of output for plausible parameterizations.