Author: Andres Francisco Donangelo
Publisher:
ISBN:
Category :
Languages : en
Pages : 296
Get Book Here
Book Description
This dissertation explores the intersection between labor and financial markets, in which labor mobility plays a fundamental role. Unlike physical assets such as buildings or machines, human capital can actually walk away from the firm as employees and managers switch employers. The interaction between labor mobility, firm risk and human capital has been remarkably under-researched until now. The main question of this broad project is how differences in the flexibility of workers to find employment across different industries--labor mobility--affects the owners of human and physical capital. The three parts of the dissertation look at this question from different angles. The first part, Labor Mobility and the Cross-Section of Expected Returns, focuses on the effect of labor mobility on the degree of operating leverage of a firm and thus on asset returns. I construct a dynamic model where worker's employment decisions affect the productivity of capital and asset prices in predictable ways. The model shows that reliance on a workforce with flexibility to enter and exit an industry translates into a form of operating leverage that amplifies equity-holders' exposure to productivity shocks. Consequently, firms in an industry with mobile workers have higher systematic risk loadings and higher expected asset returns. I use data from the Bureau of Labor Statistics to construct a novel measure of labor supply mobility, in line with the model, based on the composition of occupations across industries over time. I document a positive and economically significant cross-sectional relation between measures of labor mobility, operating leverage, and expected asset returns. This relation is not explained by firm characteristics known in the literature to predict expected returns. The second part, Aggregate Asset-Pricing Implications of Human Capital Mobility in General Equilibrium, extends the model in the first chapter to consider the general equilibrium implications of labor mobility. The setup is based on a multi-industry dynamic economy with production. The extended model shows that mobility of labor affects not only cash-flows, but also aggregate risk, and the equity premium. This part considers two different types of human capital. Generalist human capital can move between industries, while specialized human capital and physical capital cannot. The greater relative mobility of human capital relative to physical capital affects how aggregate risk in the economy is split between these two components of total wealth. The model shows that aggregate consumption and wealth increase when human capital is more mobile. However, at the same time, aggregate risk and the equity risk premium also increase under human capital mobility. I assume that the workforce in the economy is exogenously given in the first two chapters of this dissertation. This assumption is relaxed in the third chapter, Investments in Human Capital and Expected Asset Returns, where I endogenize the composition of occupations to discuss the interaction between human capital investments and labor mobility. This chapter focuses on the decision of workers to acquire different types of costly human capital with different degrees of associated labor mobility. This part introduces a two-sector general-equilibrium model with production and investments in human capital (i.e. education). Ex-ante identical workers face a trade-off between breadth and depth in the acquisition of industry-specific labor productivity. This chapter derives sufficient conditions for the existence of mobile workers. When these conditions are met, a fraction of workers chooses to acquire mobile but less productive generalist skills, even when labor risk can be fully hedged in financial markets.
Author: Vanessa M. Holmes
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
The study in Essay 1, entitled "Human Capital, Asset Pricing and Price Factors, "seeks to determine the relation between firm human capital and market valuation, specifically, the question of whether human capital is incorporated into the share price of publicly-held firms. Human capital is investigated through the use of various market valuation models.
Author: Alexandros T. Mourmouras
Publisher:
ISBN:
Category :
Languages : en
Pages : 190
Get Book Here
Book Description
Author: Miguel Palacios
Publisher:
ISBN:
Category :
Languages : en
Pages : 300
Get Book Here
Book Description
Author: Elisabeth Magnani
Publisher:
ISBN:
Category :
Languages : en
Pages : 320
Get Book Here
Book Description
Author: Thomas Lange
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
Author: Euikyu Choi
Publisher:
ISBN:
Category :
Languages : en
Pages : 65
Get Book Here
Book Description
This dissertation examines various aspects of human capital and their linkage to the financial markets. The first chapter empirically shows that the cost of debt is systematically higher for firms that operate in mobile labor markets. We posit two channels through which labor mobility could positively affect firms' cost of debt. First, relates to greater default risk arising from potential loss of key personnel and a corresponding reduction in future cash flows, while the second relates to lower liquidation value (collateral) given that the firms' human capital is more transient, which reduces pledgeable assets. Using across state, cross-sectional variations in the degree of enforceability of non-compete agreements which restrict employee mobility as a proxy for anticipated labor mobility, and state-level reforms to non-compete laws to capture exogenous shocks to labor mobility, we find that labor mobility (inverse of the strength of non-compete enforceability) has a significantly positive effect on the credit spreads of public corporate bonds (our measure of the cost of debt) issued from 1990 - 2014 for large, U.S. industrial firms. Moreover, the analysis reveals that the effect of labor mobility is greater for firms that are located in states which have a higher concentration of industry rivals or for firms that are comprised primarily of professional, knowledge workers, which corroborates the main results. Overall, these findings suggest that creditors price financial contracts by taking into account the risk that arises from labor mobility. The second chapter examines the effect of shareholder monitoring on the relation between human capital and firm value. The extant literature suggests that influential, concentrated ownership facilitates close shareholder monitoring and reduces information asymmetries between shareholders and the firm (Demsetz, 1985; Anderson and Reeb, 2003). Yet, intense monitoring by shareholders can impede employees' initiatives and effort (Shleifer and Vishny, 1988; Burkart, Gromb, and Panunzi, 1997). We argue that such a cost can be significant when firm output relies on specialized - rather than more generic - human capital, which require self-motivation and autonomy to be productive. Consistent with our argument, the empirical evidence indicates that firm value suffers in the presence of highly influential ownership, but only when firm productivity depends on specialized human capital. We do not find such an effect when human capital is more generalized. Specifically, we observe that an equity portfolio that is long on firms with influential ownership and short on firms without influential ownership earns a significantly negative abnormal return from 2002 to 2010, but again, only for firms with specialized human capital. Overall, our results delineate the importance of considering the linkages between human capital and financial markets, which could impact the allocation of capital in the economy, and moreover, on economic growth.
Author: Garrett Anstreicher
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
In this dissertation, I study the interplay of familial and geographic factors in influencing human capital development and economic mobility in the United States. The first chapter extends a canonical model of intergenerational human capital investment to a geographic context in order to study the role of migration in determining optimal human capital accumulation and income mobility in the United States. The main result is that migration is considerably influential in shaping the high rates of economic mobility observed among children from low-wage areas, with human capital investment behavioral responses being important to consider. Equalizing school quality across locations does more to reduce interstate inequality in income mobility than equalizing skill prices, and policies that attempt to decrease human capital flight from low-wage areas via cash transfers are unlikely to be cost-effective. The second chapter, joint with Joanna Venator, studies how childcare costs, the location of extended family, and fertility events influence both the labor force attachment and labor mobility of women in the United States. We begin by empirically documenting strong patterns of women returning to their home locations in anticipation of fertility events, indicating that the desire for intergenerational time transfers is an important motivator of home migration. Moreover, women who reside in their parent's location experience a substantial long-run reduction in their child earnings penalty. Next, we build a dynamic model of labor force participation and migration to assess the incidence of counterfactual scenarios and childcare policies. We find that childcare subsidies increase lifetime earnings and labor mobility for women, with particularly strong effects for women who are ever single mothers and Blacks. Ignoring migration understates these benefits by a meaningful extent. The third chapter, joint with Owen Thompson and Jason Fletcher, studies the long-run impacts of court-ordered desegregation. Court ordered desegregation plans were implemented in hundreds of US school districts nationwide from the 1960s through the 1980s, and were arguably the most substantive national attempt to improve educational access for African American children in modern American history. Using large Census samples that are linked to Social Security records containing county of birth, we implement event studies that estimate the long run effects of exposure to desegregation orders on human capital and labor market outcomes. We find that African Americans who were relatively young when a desegregation order was implemented in their county of birth, and therefore had more exposure to integrated schools, experienced large improvements in adult human capital and labor market outcomes relative to Blacks who were older when a court order was locally implemented. There are no comparable changes in outcomes among whites in counties undergoing an order, or among Blacks who were beyond school ages when a local order was implemented. These effects are strongly concentrated in the South, with largely null findings in other regions. Our data and methodology provide the most comprehensive national assessment to date on the impacts of court ordered desegregation, and strongly indicate that these policies were in fact highly effective at improving the long run socioeconomic outcomes of many Black students.
Author: Darrell Duffie
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 0
Get Book Here
Book Description
We present a model for the equilibrium movement of capital between asset markets that are distinguished only by the levels of capital invested in each. Investment in that market with the greatest amount of capital earns the lowest risk premium. Intermediaries optimally trade off the costs of intermediation against fees that depend on the gain they can offer to investors for moving their capital to the market with the higher mean return. Those fees also depend on the bargaining power of the investor, in light of potential alternative intermediaries. In equilibrium, the speeds of adjustment of mean returns and of capital between the two markets are increasing in the degree to which capital is imbalanced between the two markets.
Author: Willem H. Buiter
Publisher:
ISBN:
Category : Capital
Languages : en
Pages : 58
Get Book Here
Book Description
This paper considers the effects of fiscal and financial policy on economic growth in open and closed economies, when human capital formation by young households is constrained by the illiquidity of human wealth. Both endogenous and exogenous growth versions of the basic OLG model are analyzed. We find that intergenerational redistribution policies that discourage physical capital formation may encourage human capital formation. Despite common technologies and perfect international mobility of financial capital, the non- tradedness of human capital and the illiquidity of human wealth make for persistent differences in productivity growth rates (in the endogenous growth version of the model) or in their levels (in the exogenous growth version). We also consider the productivity growth (or level) effects of public spending on education and of the distortionary taxation of financial asset income.
