Labor-Market Integration, Investment in Risky Human Capital, and Fiscal Competition

2000 ◽  
Vol 90 (1) ◽  
pp. 73-95 ◽  
Author(s):  
David E Wildasin
Keyword(s):  
Human Capital ◽  
Labor Market ◽  
Market Integration ◽  
Capital Investment ◽  
Human Capital Investment ◽  
Skilled Labor ◽  
Fiscal Competition ◽  
Skilled Workers ◽  
Public Provision ◽  
Labor Market Integration

This paper presents a general-equilibrium model where human capital investment increases specialization and exposes skilled workers to region-specific earnings risk. Interjurisdictional mobility of skilled labor mitigates these risks; state-contingent migration of skilled labor also improves efficiency. With perfect capital markets, labor-market integration raises welfare and reduces ex post earnings inequality. If instead human capital investment can only be financed through local taxes, labor-market integration leads to interjurisdictional fiscal competition, shifting the burden of taxation to low-skilled immobile workers. Decentralized public provision of human capital investment creates earnings inequalities and is inefficient. (JEL H00)

scholarly journals Different Patterns of Labor Market Integration by Migration Motivation in Europe: The Role of Host Country Human Capital

2018 ◽  
Vol 53 (1) ◽  
pp. 59-89 ◽  
Author(s):  
Wouter Zwysen
Keyword(s):  
Human Capital ◽  
Labor Market ◽  
Host Country ◽  
Market Integration ◽  
Ad Hoc ◽  
Labour Force ◽  
Occupational Status ◽  
Substantial Part ◽  
Market Outcomes ◽  
Labor Market Integration

We study whether the acquisition of host country human capital, such as obtaining equivalent qualifications, good language skills, or naturalization, explains differences in labor market integration between migrants depending on their initial motivation. We use cross-national European data from the 2008 ad hoc module of the Labour Force Survey to analyze migrant gaps in labor market participation, employment, occupational status, and precarious employment. We find that different rates of and returns to host country human capital explain a substantial part of the improvements in labor market outcomes with years of residence, particularly for noneconomic migrants who experience faster growth on average.

Promotion Signaling and Human Capital Investments

2020 ◽  
Vol 12 (1) ◽  
pp. 125-155 ◽  
Author(s):  
Michael Waldman ◽  
Ori Zax
Keyword(s):  
Human Capital ◽  
Labor Market ◽  
Capital Investment ◽  
Investment Decisions ◽  
Human Capital Investment ◽  
Capital Investments ◽  
Human Capital Investments ◽  
Asymmetric Learning ◽  
Specific Human Capital ◽  
Investment Choices

In a world characterized by asymmetric learning, promotions can serve as signals of worker ability, and this, in turn, can result in inefficient promotion decisions. If the labor market is competitive, the result will be practices that reduce this distortion. We explore how this logic affects human capital investment decisions. We show that, if commitment is possible, investments will be biased toward the accumulation of firm-specific human capital. We also consider what happens when commitment is not possible and show a number of results including that, if investment choices are not publicly observable, choices are frequently efficient. (JEL D82, J24, J31, M12, M51)

scholarly journals Labor Market Incentives to Stay in School

1993 ◽  
Vol 25 (2) ◽  
pp. 82-94 ◽  
Author(s):  
Judith I. Stallmann ◽  
Thomas G. Johnson ◽  
Ari Mwachofi ◽  
Jan L. Flora
Keyword(s):  
High School ◽  
Human Capital ◽  
Labor Market ◽  
Rural Communities ◽  
Capital Investment ◽  
Investment Decisions ◽  
Human Capital Investment ◽  
Capital Theory ◽  
Job Information ◽  
Job Opportunities

AbstractHuman capital theory suggests that job opportunities will create incentives for human capital investment. If job information does not flow freely, or if they prefer not to move, students will make investment decisions based upon local job markets. Communities with a high percentage of low-skill jobs which do not reward high school and higher education do not create incentives for students to finish high school or continue beyond high school. Data from Virginia support this hypothesis. Targeted job creation, and improved labor market information may create incentives for increased human capital investment in many rural communities.

scholarly journals Motivation, Human Capital Investment and Compensation in an Agency Problem

2019 ◽  
Vol 10 (4) ◽  
pp. 37
Author(s):  
Anthony M Marino
Keyword(s):  
Human Capital ◽  
Labor Market ◽  
Capital Investment ◽  
Agency Problem ◽  
Human Capital Investment ◽  
Optimal Investment ◽  
Firm Productivity ◽  
Participation Constraint ◽  
Hidden Action

This paper considers a firm's optimal investment in training and motivation measures in a hidden action agency problem. We study how these strategies interact with each other and the contract in order to create value for the firm. Productivity enhancing training can be firm specific or non-firm specific and firm specific motivation can enhance utility or reduce effort cost. Whether these measures are complements or independents depends on the firm specificity of human capital and whether the participation constraint is binding. We characterize how a tighter labor market affects marginal profitabilities and examine the relative benefits of motivation measures which enhance utility versus those which decrease effort cost.

Sign in / Sign up

Export Citation Format

Share Document