Excess entry - or the high failure rate of market-entry decisions - is often attributed to overconfidence exhibited by entrepreneurs. We show analytically that whereas excess entry is an inevitable consequence of imperfect assessments of entrepreneurial skill, it does not imply overconfidence. Judgmental fallibility leads to excess entry even when everyone is underconfident. Self-selection implies greater confidence (but not necessarily overconfidence) among those who start new businesses than those who do not and among successful entrants than failures. Our results question claims that entrepreneurs are overconfident and emphasize the need to understand the role of judgmental fallibility in producing economic outcomes.
{"title":"Entrepreneurial Success and Failure: Confidence and Fallible Judgement","authors":"R. Hogarth, Natalia Karelaia","doi":"10.2139/ssrn.1374234","DOIUrl":"https://doi.org/10.2139/ssrn.1374234","url":null,"abstract":"Excess entry - or the high failure rate of market-entry decisions - is often attributed to overconfidence exhibited by entrepreneurs. We show analytically that whereas excess entry is an inevitable consequence of imperfect assessments of entrepreneurial skill, it does not imply overconfidence. Judgmental fallibility leads to excess entry even when everyone is underconfident. Self-selection implies greater confidence (but not necessarily overconfidence) among those who start new businesses than those who do not and among successful entrants than failures. Our results question claims that entrepreneurs are overconfident and emphasize the need to understand the role of judgmental fallibility in producing economic outcomes.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115533420","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The debate over the Phillips Curve - as the relation between level of unemployment rate and inflation rate - in historical economics is shortly reviewed. By using the analysis in the Extreme Value Theory, i.e.: the rank order statistics the unemployment and inflation data over countries from various regions are observed. The calculations brought us to conjecture that there exists the general pattern that could lead from the relation between unemployment and inflation rate. However, the difference patterns as observed in the Phillips Curve might could be reflected from the range of values of the local variables of the incorporated model.
{"title":"The Global and Local in Phillips Curve","authors":"Hokky Situngkir","doi":"10.2139/ssrn.1312832","DOIUrl":"https://doi.org/10.2139/ssrn.1312832","url":null,"abstract":"The debate over the Phillips Curve - as the relation between level of unemployment rate and inflation rate - in historical economics is shortly reviewed. By using the analysis in the Extreme Value Theory, i.e.: the rank order statistics the unemployment and inflation data over countries from various regions are observed. The calculations brought us to conjecture that there exists the general pattern that could lead from the relation between unemployment and inflation rate. However, the difference patterns as observed in the Phillips Curve might could be reflected from the range of values of the local variables of the incorporated model.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127212077","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the article social rate of return to education is considered. As is pointed out in various research papers social return rate exceeds the pure technical rate of return by considerable margin. However, it is hard to calculate adequate figure due to methodological and data problems. The model used in the article is based on a comparative advantage theory. It contains two equations: one for technical and social rate of return to education, second deals with non-random selection for different education regimes. We find that private rate of return is over 7% yearly and therefore is still among the highest in Europe and there exists additional 1.5% social return to higher education.
{"title":"External Return to Education in Poland","authors":"P. Strawiński","doi":"10.2139/ssrn.1310206","DOIUrl":"https://doi.org/10.2139/ssrn.1310206","url":null,"abstract":"In the article social rate of return to education is considered. As is pointed out in various research papers social return rate exceeds the pure technical rate of return by considerable margin. However, it is hard to calculate adequate figure due to methodological and data problems. The model used in the article is based on a comparative advantage theory. It contains two equations: one for technical and social rate of return to education, second deals with non-random selection for different education regimes. We find that private rate of return is over 7% yearly and therefore is still among the highest in Europe and there exists additional 1.5% social return to higher education.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115947042","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we quantitatively assess the welfare implications of alternative public education spending rules. To this end, we employ a dynamic stochastic general equilibrium model in which human capital externalities and public education expenditures, financed by distorting taxes, enhance the productivity of private education choices. We allow public education spending, as share of output, to respond to various aggregate indicators in an attempt to minimize the market imperfection due to human capital externalities. We also expose the economy to varying degrees of uncertainty via changes in the variance of total factor productivity shocks. Our results indicate that, in the face of increasing aggregate uncertainty, active policy can significantly outperform passive policy (i.e. maintaining a constant public education to output ratio) but only when the policy instrument is successful in smoothing the growth rate of human capital.
{"title":"Welfare Implications of Public Education Spending Rules","authors":"K. Angelopoulos, J. Malley, A. Philippopoulos","doi":"10.2139/ssrn.1324572","DOIUrl":"https://doi.org/10.2139/ssrn.1324572","url":null,"abstract":"In this paper, we quantitatively assess the welfare implications of alternative public education spending rules. To this end, we employ a dynamic stochastic general equilibrium model in which human capital externalities and public education expenditures, financed by distorting taxes, enhance the productivity of private education choices. We allow public education spending, as share of output, to respond to various aggregate indicators in an attempt to minimize the market imperfection due to human capital externalities. We also expose the economy to varying degrees of uncertainty via changes in the variance of total factor productivity shocks. Our results indicate that, in the face of increasing aggregate uncertainty, active policy can significantly outperform passive policy (i.e. maintaining a constant public education to output ratio) but only when the policy instrument is successful in smoothing the growth rate of human capital.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114499368","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Teachers are increasingly being drawn from the lower parts of the general ability distribution, but it is not clear how this affects student achievement. We track the position of entering teachers in population-wide cognitive and non-cognitive ability distributions using school grades and draft records from Swedish registers. The impact on student achievement caused by the position of teachers in these ability distributions is estimated using matched student-teacher data. On average, teachers' cognitive and non-cognitive social interactive abilities do not have a positive effect on student performance. However, social interactive ability turns out to be important for low aptitude students, whilst the reverse holds for cognitive abilities. In fact, while high performing students benefit from high cognitive teachers, being matched to such a teacher can even be detrimental to their lower performing peers. Hence, the lower abilities among teachers may hurt some students, whereas others may even benefit. High cognitive and non-cognitive abilities thus need not necessarily translate into teacher quality. Instead, these heterogeneities highlight the importance of the student-teacher matching process.
{"title":"One Size Fits All? The Effects of Teacher Cognitive and Non-Cognitive Abilities on Student Achievement","authors":"E. Gronqvist, Jonas Vlachos","doi":"10.2139/ssrn.1311222","DOIUrl":"https://doi.org/10.2139/ssrn.1311222","url":null,"abstract":"Teachers are increasingly being drawn from the lower parts of the general ability distribution, but it is not clear how this affects student achievement. We track the position of entering teachers in population-wide cognitive and non-cognitive ability distributions using school grades and draft records from Swedish registers. The impact on student achievement caused by the position of teachers in these ability distributions is estimated using matched student-teacher data. On average, teachers' cognitive and non-cognitive social interactive abilities do not have a positive effect on student performance. However, social interactive ability turns out to be important for low aptitude students, whilst the reverse holds for cognitive abilities. In fact, while high performing students benefit from high cognitive teachers, being matched to such a teacher can even be detrimental to their lower performing peers. Hence, the lower abilities among teachers may hurt some students, whereas others may even benefit. High cognitive and non-cognitive abilities thus need not necessarily translate into teacher quality. Instead, these heterogeneities highlight the importance of the student-teacher matching process.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115005729","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the relationship between international migration and source country fertility. The impact of international migration on source country fertility may have a number of causes, including a transfer of destination countries' fertility norms and an incentive to acquire more education. We provide a rigorous test of the diffusion of fertility norms using original and detailed data on migration. Our results provide evidence of a strong transfer of fertility norms from migrants to their country of origin.
{"title":"International Migration, Transfers of Norms and Home Country Fertility","authors":"Michel A. R. Beine, F. Docquier, Maurice Schiff","doi":"10.1596/1813-9450-4925","DOIUrl":"https://doi.org/10.1596/1813-9450-4925","url":null,"abstract":"This paper examines the relationship between international migration and source country fertility. The impact of international migration on source country fertility may have a number of causes, including a transfer of destination countries' fertility norms and an incentive to acquire more education. We provide a rigorous test of the diffusion of fertility norms using original and detailed data on migration. Our results provide evidence of a strong transfer of fertility norms from migrants to their country of origin.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"49 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115147883","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2008-12-01DOI: 10.1111/j.1468-0106.2008.00418.x
Innwon Park, Soonchan Park
The spread of regional trade agreements (RTAs) is strongly motivated by the desire for more foreign direct investment (FDI) flows. The net benefits from freer capital flows are expected to trigger a domino effect of new regionalism. However, this is still an empirical question to be tested, especially for the case of East Asia. This paper quantitatively estimates the investment creation and diversion effects of RTAs by using an extended gravity equation focusing on domestic reform as a commitment device for RTA membership. As a case study, we investigate whether reform-minded less developed countries (LDCs) can trigger this domino effect by actively participating in RTAs. Moreover, in order to search for the most preferable member pair among the proposed East Asian RTAs, we estimate the likely impact of the East Asian RTAs on inward FDI stock. From our empirical analyses, we find that (i) reform-creating RTA membership, larger market size, better skilled labor, and lower trade costs all contribute positively and significantly to inward FDI stock; (ii) reformatory LDCs attract more FDI in addition to the investment creation effect of their RTA membership; and (iii) most of proposed East Asian RTAs promote intra-bloc FDI. In particular, both South-North and North-North RTA such as an ASEAN-Japan and a Japan-Korea RTA prove to be more preferable membership combinations to South-South RTAs in East Asia.
{"title":"Reform Creating Regional Trade Agreements and Foreign Direct Investment: Applications for East Asia","authors":"Innwon Park, Soonchan Park","doi":"10.1111/j.1468-0106.2008.00418.x","DOIUrl":"https://doi.org/10.1111/j.1468-0106.2008.00418.x","url":null,"abstract":"The spread of regional trade agreements (RTAs) is strongly motivated by the desire for more foreign direct investment (FDI) flows. The net benefits from freer capital flows are expected to trigger a domino effect of new regionalism. However, this is still an empirical question to be tested, especially for the case of East Asia. This paper quantitatively estimates the investment creation and diversion effects of RTAs by using an extended gravity equation focusing on domestic reform as a commitment device for RTA membership. As a case study, we investigate whether reform-minded less developed countries (LDCs) can trigger this domino effect by actively participating in RTAs. Moreover, in order to search for the most preferable member pair among the proposed East Asian RTAs, we estimate the likely impact of the East Asian RTAs on inward FDI stock. From our empirical analyses, we find that (i) reform-creating RTA membership, larger market size, better skilled labor, and lower trade costs all contribute positively and significantly to inward FDI stock; (ii) reformatory LDCs attract more FDI in addition to the investment creation effect of their RTA membership; and (iii) most of proposed East Asian RTAs promote intra-bloc FDI. In particular, both South-North and North-North RTA such as an ASEAN-Japan and a Japan-Korea RTA prove to be more preferable membership combinations to South-South RTAs in East Asia.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128059743","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Atkinson-Stiglitz (1976) theorem on the undesirability of nonuniform excise taxation when all agents have homogeneous, separable preferences is extended to allow for nonseparability with respect to endogenous variables that will be subject to distortions. The result is useful for analysing models with production and education. For such models, the conclusion of Bovenberg and Jacobs (2005), that it is desirable to distort production rather than education choices, is shown to be reversed if the hidden characteristic affects the cost of education rather than productivity.
{"title":"A Generalization of the Atkinson-Stiglitz (1976) Theorem on the Undesirability of Nonuniform Excise Taxation","authors":"M. Hellwig","doi":"10.2139/ssrn.1313007","DOIUrl":"https://doi.org/10.2139/ssrn.1313007","url":null,"abstract":"The Atkinson-Stiglitz (1976) theorem on the undesirability of nonuniform excise taxation when all agents have homogeneous, separable preferences is extended to allow for nonseparability with respect to endogenous variables that will be subject to distortions. The result is useful for analysing models with production and education. For such models, the conclusion of Bovenberg and Jacobs (2005), that it is desirable to distort production rather than education choices, is shown to be reversed if the hidden characteristic affects the cost of education rather than productivity.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125906163","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I use an experiment to examine whether expanding employee decision making - by either allowing employees to jointly determine firm activities with employers or assigning employees the sole authority to determine these activities - affects contributions to firm value. I investigate this issue in an informal reward setting where employers cannot commit to how employees will be rewarded. Experimental results demonstrate that employees jointly determining firm activities with employers evaluated the decision-making environment to be fairer than employees with either no role or sole authority to choose firm activities which led them to derive more enjoyment from their work environment which ultimately led them to contribute a greater amount to firm value. Despite the higher contributions, employees with a joint role neither expected nor received a greater informal reward from employers. My findings contribute to literature suggesting that the incorporation of non-pecuniary factors such as employees' preferences for a fair decision-making environment into organizational architecture designs can increase the efficiency of employment relationships.
{"title":"The Effects of Expanding Employee Decision Making on Contributions to Firm Value in an Informal Reward Environment","authors":"Michael G. Williamson","doi":"10.2139/ssrn.954349","DOIUrl":"https://doi.org/10.2139/ssrn.954349","url":null,"abstract":"I use an experiment to examine whether expanding employee decision making - by either allowing employees to jointly determine firm activities with employers or assigning employees the sole authority to determine these activities - affects contributions to firm value. I investigate this issue in an informal reward setting where employers cannot commit to how employees will be rewarded. Experimental results demonstrate that employees jointly determining firm activities with employers evaluated the decision-making environment to be fairer than employees with either no role or sole authority to choose firm activities which led them to derive more enjoyment from their work environment which ultimately led them to contribute a greater amount to firm value. Despite the higher contributions, employees with a joint role neither expected nor received a greater informal reward from employers. My findings contribute to literature suggesting that the incorporation of non-pecuniary factors such as employees' preferences for a fair decision-making environment into organizational architecture designs can increase the efficiency of employment relationships.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131342389","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The self-efficacy construct has been studied from two different viewpoints. Firstly, in a specific manner, as it was originally proposed and secondly, in a generalized way, defined as an optimistic self-belief of personal capability to cope efficiently and competently with a variety of situations. In order to measure this construct at the broadest level the General Self Efficacy Scale (GSE) was designed and adapted to Spanish in Costa Rica. This study aimed at validating the scale in a Colombian sample composed of college students. Participants were also administered the Situational Personality Questionnaire (named in Spanish as Cuestionario de Personalidad Situacional, CPS) and its factors have, theoretically speaking, a certain relationship with the studied construct. According to the results, the GSE showed a high internal consistency (Cronbach's alpha value of .83). Convergent and discriminant validity of this instrument were evaluated through the CPS and positive correlations were obtained with efficacy, confidence, self-concept and emotional stability while negative correlations were obtained with anxiety. Through exploratory and confirmatory factor analysis, the unidimensional structure of the scale was validated.
自我效能感的建构从两个不同的角度进行了研究。首先，以一种特定的方式，正如它最初提出的那样;其次，以一种广义的方式，定义为对个人能力的乐观自信，以有效和胜任地应对各种情况。为了在最广泛的水平上测量这种结构，设计了一般自我效能量表(GSE)，并适用于哥斯达黎加的西班牙语。本研究旨在对哥伦比亚大学生样本进行验证。参与者还被执行情境人格问卷(西班牙语称为Cuestionario de Personalidad Situational, CPS)，其因素在理论上与所研究的构念有一定的关系。结果显示，GSE具有较高的内部一致性(Cronbach’s alpha值为0.83)。通过CPS评估该工具的收敛效度和判别效度，与效能、自信、自我概念和情绪稳定性呈正相关，与焦虑呈负相关。通过探索性和验证性因子分析，对量表的单维结构进行了验证。
{"title":"Psychometric Properties of the General Self-Efficacy Scale in a Colombian Sample","authors":"F. Juárez, Francoise Contreras","doi":"10.21500/20112084.907","DOIUrl":"https://doi.org/10.21500/20112084.907","url":null,"abstract":"The self-efficacy construct has been studied from two different viewpoints. Firstly, in a specific manner, as it was originally proposed and secondly, in a generalized way, defined as an optimistic self-belief of personal capability to cope efficiently and competently with a variety of situations. In order to measure this construct at the broadest level the General Self Efficacy Scale (GSE) was designed and adapted to Spanish in Costa Rica. This study aimed at validating the scale in a Colombian sample composed of college students. Participants were also administered the Situational Personality Questionnaire (named in Spanish as Cuestionario de Personalidad Situacional, CPS) and its factors have, theoretically speaking, a certain relationship with the studied construct. According to the results, the GSE showed a high internal consistency (Cronbach's alpha value of .83). Convergent and discriminant validity of this instrument were evaluated through the CPS and positive correlations were obtained with efficacy, confidence, self-concept and emotional stability while negative correlations were obtained with anxiety. Through exploratory and confirmatory factor analysis, the unidimensional structure of the scale was validated.","PeriodicalId":142467,"journal":{"name":"Labor: Human Capital","volume":"119 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131293598","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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