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Human Capital Spill-Overs Within the Workplace

Author

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  • Battu, Harminder

    (University of Aberdeen)

  • Belfield, Clive R.

    (Queens College, CUNY)

  • Sloane, Peter J.

    (Swansea University)

Abstract

An individual’s human capital has a strong influence on earnings. Yet individual, worker-level estimations of earnings rarely include the characteristics of co-workers or detailed firm-level controls. In this paper, we use a unique matched worker–workplace dataset to estimate the effect on own earnings of co-workers’ education. Our results, using the 1998 UK Workplace Employee Relations Survey, show significant effects. Own earnings premia fall slightly, but there is an independent, significantly positive effect from average workplace education. We also test for interactions between own and co-worker education levels. However, these interactions appear negative: education is valued less highly at workplaces where education levels are already high. This result runs counter to our theoretical prediction.

Suggested Citation

  • Battu, Harminder & Belfield, Clive R. & Sloane, Peter J., 2001. "Human Capital Spill-Overs Within the Workplace," IZA Discussion Papers 404, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp404
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    Cited by:

    1. Hipólito Simón, 2010. "International Differences in Wage Inequality: A New Glance with European Matched Employer–Employee Data," British Journal of Industrial Relations, London School of Economics, vol. 48(2), pages 310-346, June.
    2. Asteriou, Dimitrios & Monastiriotis, Vassilis, 2007. "What do unions do at the large scale? Macro-economic evidence from a panel of OECD countries," Journal of Applied Economics, Universidad del CEMA, vol. 7(1), pages 1-20, May.
    3. Alvarez, J. & Forrest, D. & Sanz, I. & Tena, J.D., 2011. "Impact of importing foreign talent on performance levels of local co-workers," Labour Economics, Elsevier, vol. 18(3), pages 287-296, June.
    4. Francisco Alcalá & Pedro Hernández, 2010. "Firms’ main market, human capital, and wages," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 1(4), pages 433-458, September.
    5. Christophe J. NORDMAN & François-Charles WOLFF, 2012. "On-The-Job Learning And Earnings: Comparative Evidence From Morocco And Senegal," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 35, pages 151-176.
    6. De Grip, Andries & Sauermann, Jan & Sieben, Inge, 2016. "The role of peers in estimating tenure-performance profiles: Evidence from personnel data," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 39-54.
    7. David C. Maré, 2003. "Ideas for Growth?," Working Papers 03_19, Motu Economic and Public Policy Research.
    8. Tushar Kanti Nandi, 2006. "Employee Participation and Wages: An Empirical Investigation with Selectivity Correction," Department of Economics University of Siena 483, Department of Economics, University of Siena.
    9. Travkin, Pavel, 2014. "The impact of the on-the-job training on Russian worker’s salary: The effect of abilities approach," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 51-70.
    10. Mok, Penny & Mason, Geoff & Stevens, Philip & Timmins, Jason, 2012. "A Good Worker is Hard to Find: Skills Shortages in New Zealand Firms," Occasional Papers 12/5, Ministry of Economic Development, New Zealand.
    11. Pavel V. Travkin, 2014. "The Returns To Training In Russia: A Difference-In-Differences Analysis," HSE Working papers WP BRP 56/EC/2014, National Research University Higher School of Economics.
    12. Marcos E. Domínguez Viera, 2011. "Does the Impact of Oportunidades Program Increases in Highly Competitive Regions?," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 79-111, November.
    13. Metcalfe, Renuka & Sloane, Peter J., 2007. "Human Capital Spillovers and Economic Performance in the Workplace in 2004: Some British Evidence," IZA Discussion Papers 2774, Institute of Labor Economics (IZA).
    14. Aniela Wirz, 2008. "Private returns to education versus education spill-over effects," Empirical Economics, Springer, vol. 34(2), pages 315-342, March.
    15. Alison L Booth & Gylfi Zoega, 2005. "Worker Heterogeneity, Intra-firm Externalities and Wage Compression," Birkbeck Working Papers in Economics and Finance 0515, Birkbeck, Department of Economics, Mathematics & Statistics.
    16. Clive Belfield, 2005. "Workforce gender effects on firm performance and workers' pay: evidence for the UK," Applied Economics, Taylor & Francis Journals, vol. 37(8), pages 885-891.
    17. Alcala, Francisco & Hernandez, Pedro J., 2005. "Firm characteristics, labor sorting, and wages," MPRA Paper 1226, University Library of Munich, Germany, revised 17 Nov 2006.

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    More about this item

    Keywords

    workplace performance; human capital; Educational economics;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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