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Human Capital: Theoretical and Empirical Insights
Author(s) -
BOTTONE GERMANA,
SENA VANIA
Publication year - 2011
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/j.1536-7150.2011.00781.x
Subject(s) - workforce , human capital , context (archaeology) , corporate governance , empirical research , population , quality (philosophy) , lifelong learning , business , political science , economic growth , economics , sociology , geography , finance , law , statistics , demography , philosophy , archaeology , mathematics , epistemology
There is nothing more difficult to plan, moreDoubtful of success, nor more dangerous to manageThan the creation of a new system.For the initiator has the enmity of all who wouldProfit by the preservation of the old system, andMerely lukewarm defenders in those who should gainBy the new one.N. Machiavelli (1513)A bstract The purpose of this paper is twofold. First, we want to challenge the notion of “human capital” as “education, training and work experience” and suggest that it is the “quality of the workforce” that matters, here defined as the set of characteristics that allow workers to function in a specific institutional and historical context. Our main conclusion is that the quality of the workforce is affected by the institutional environment where the workers live and that therefore it can vary across countries and institutional contexts. Second, we want to show the empirical relevance of this last point by testing the extent to which the quality of institutions (here proxied by the governance indicators of Kaufmann et al. (2007)) can affect the quality of the workforce (proxied by the percentage of the working age population registered in a lifelong learning program). Our empirical analysis is conducted on a data‐set of 11 European countries observed over the period 1996–2006. The results indicate that countries with better governance indicators are also endowed with a more qualified workforce.