A Wage Based Measure of Aggregate Human Capital

The role of the accumulation of human capital to per capita income growth has been sharply debated among economists and policy makers. One open question of this debate is how to measure human capital. The standard approach is to use the average years of education of the labour force or the school enrolment rates as proxies for the stock of human capital. However, formal schooling achievement does not fully capture all the human capital stock. In fact, other forms of human capital accumulation are unmeasured. Also, it is assumed that the productivity differentials among workers with different levels of schooling are proportional to their years of education. In order to solve these problems, we develop the Mulligan and Sala-i-Martin’s measure of human capital based, on labour income. This measure has some nice properties: is consistent with variable elasticities of substitution across types of workers, and does not impose all workers with the same amount of education to have the same amount of skill. It is also allowed for changes in the relative productivities over time and across different economies. We compute the index at the firm level and, finally, and we compare the evolution of our index with the evolution of average years of education for the Portuguese regions, highlighting the shortcomings of the latter measure of human capital. Keywords: Human capital, wages, income based measures JEL Classification: E24, J24, I21

Young Employment, Job-Skill Composition and Minimum Wages: Evidence from a 'Natural Experiment'

Empirically very little is known about the impact of an increase in the minimum wage of young workers on the job-skill composition. This is an important question because small (or zero) effects on teenage employment may mask a substitution of more for less-skilled teenagers. Therefore, the estimation of the elasticity of substitution between skilled and unskilled workers is required. This paper will consider the increase in the minimum wage of young workers that took place in Portugal on the 1st January, 1987. This change is of particular interest, not only because it was so large (33% in real terms) and affected a significant share of workers under 20 years old (about 20%), but also because it motivated a decrease in the wage premium earned by young skilled workers from 1.24 to 1.20. The results are consistent with the view that the minimum wage increase had some negative impact on employment of unskilled workers, the most affected group: an increase of 1% in wage induced by the increase in minimum wage reduces employment of this group of workers between 0.42% to 0.47%. Nevertheless, this negative impact was partially compensated by the substitution of more for less-skilled teenagers, because there is some evidence that the elasticity of substitution between young workers with different skills is different from zero.

Searching, Matching and Education: a Note

In this paper the individual optimal level of education is set in a frictional labor market, where matching is not perfect. Also search frictions are a function of the average education can improve economic efficiency, not only through improvements in workers productivity, but also making the matching process more efficient, and thus reducing the unemployment level.Education, Externalities, Search, Matching, Unemployment.

Identification of the Portuguese industrial districts

Some authors have tried to define a methodology of identification of the local production systems, namely in terms of the operationalization of the notion of industrial district. For the Portuguese case, there is no previous work, using of a systematic methodology of the identification, on the identification of the industrial districts, in spite of the existence of some case studies.In this paper we propose an algorithm of classification, based on the cluster analysis, and we try to find clusters of homogeneous geographical units, in order to identify the ones that we might classify as industrial districts. Our results point that almost one third of the Portuguese employment in manufacturing and 13% of all employment, is located in industrial districts. A detailed analysis of other variables, shows that the Portuguese industrial districts’ characteristics are very close to the ones found in other contexts.

A Wage based measure of regional aggregate human capital

The role of the accumulation of human capital to per capita income growth has been sharply debated among economists and policy makers. One open question of this debate is how to measure human capital. The standard approach is to use the average years of education of the labour force or the school enrolment rates as proxies for the stock of human capital. However, formal schooling achievement does not fully capture all the human capital stock. In fact, other formsof human capital accumulation are unmeasured. Also, it is assumed that the productivity differentials among workers with different levels of schooling are proportional to their years of education. In order to solve these problems, we develop the Mulligan and Sala-i-Martin’s measure of human capital based, on labour income. This measure has some nice properties: is consistent with variable elasticities of substitution across types of workers, and does not impose all workers with the same amount of education to have the same amount of skill. It is also allowed for changes in the relative productivities over time and across different economies.We compute the index at the firm level and, finally, and we compare the evolution of our index with the evolution of average years of education for the Portuguese regions, highlighting the shortcomings of the latter measure of human capital

A Wage Based Measure of Aggregate Human Capital

The role of the accumulation of human capital to per capita income growth has been sharply debated among economists and policy makers. One open question of this debate is how to measure human capital. The standard approach is to use the average years of education of the labour force or the school enrolment rates as proxies for the stock of human capital. However, formal schooling achievement does not fully capture all the human capital stock. In fact, other forms of human capital accumulation are unmeasured. Also, it is assumed that the productivity differentials among workers with different levels of schooling are proportional to their years of education. In order to solve these problems, we develop the Mulligan and Sala-i-Martin’s measure of human capital based, on labour income. This measure has some nice properties: is consistent with variable elasticities of substitution across types of workers, and does not impose all workers with the same amount of education to have the same amount of skill. It is also allowed for changes in the relative productivities over time and across different economies. We compute the index at the firm level and, finally, and we compare the evolution of our index with the evolution of average years of education for the Portuguese regions, highlighting the shortcomings of the latter measure of human capital. Keywords: Human capital, wages, income based measures JEL Classification: E24, J24, I2

Identification of the Portuguese industrial districts

Some authors have tried to define a methodology of identification of the local production systems, namely in terms of the operationalization of the notion of industrial district. For the Portuguese case, there is no previous work, using of a systematic methodology of the identification, on the identification of the industrial districts, in spite of the existence of some case studies. In this paper we propose an algorithm of classification, based on the cluster analysis, and we try to find clusters of homogeneous geographical units, in order to identify the ones that we might classify as industrial districts. Our results point that almost one third of the Portuguese employment in manufacturing and 13% of all employment, is located in industrial districts. A detailed analysis of other variables, shows that the Portuguese industrial districts’ characteristics are very close to the ones found in other contexts.Fundação para a Ciência e a Tecnologia (FCT

Young employment, job-skill composition and minimum wages: evidence from a "natural experiment"

Empirically very little is known about the impact of an increase in the minimum wage of young workers on the job-skill composition. This is an important question because small (or zero) effects on teenage employment may mask a substitution of more for less-skilled teenagers. Therefore, the estimation of the elasticity of substitution between skilled and unskilled workers is required. This paper will consider the increase in the minimum wage of young workers that took place in Portugal on the 1st January, 1987. This change is of particular interest, not only because it was so large (33% in real terms) and affected a significant share of workers under 20 years old (about 20%), but also because it motivated a decrease in the wage premium earned by young skilled workers from 1.24 to 1.20. The results are consistent with the view that the minimum wage increase had some negative impact on employment of unskilled workers, the most affected group: an increase of 1% in wage induced by the increase in minimum wage reduces employment of this group of workers between 0.42% to 0.47%. Nevertheless, this negative impact was partially compensated by the substitution of more for less-skilled teenagers, because there is some evidence that the elasticity of substitution between young workers with different skills is different from zero.Universidade do Minho (UM)

Employment and exchange rates: the role of openness and technology

Real exchange rate movements are important drivers of the reallocation of resources between sectors of the economy. Economic theory suggests that the impact of exchange rates should vary with the degree of exposure to international competition and with the technology level. This paper contributes by bringing together these two views, both theoretically and empirically. We show that both the degree of openness and the technology level mediate the impact of exchange rate movements on labour market developments. According to our estimations, whereas employment in high-technology sectors seems to be relatively immune to changes in real exchange rates, these appear to have sizable and significant effects on highly open low-technology sectors. The analysis of job flows suggests that the impact of exchange rates on these sectors occurs through employment destruction.exchange rates, international trade, job flows.

Estimating the employer size-wage premium in a panel data model with comparative advantage and non-random selection

This paper considers the estimation of the employer-size wage e?ect using a panel of employer-employee matched data. We test for the possibility of different returns to observable human capital variables as well as examine the role played by unmeasured skills in driving the allocation of workers across firms of di?erent sizes. Our results show that some of the observed skills; namely, education, age, and tenure have high returns in large firms, while the opposite is true for high skilled occupations and for the gender gap. On the other hand, the price of non-observed skills is reduced as firm size increases. This finding is consistent with explanations based on the premise that large employers have more difficulty monitoring workers, which therefore leads them to monitor less closely.firm size, wages, non-random selection.