Human Capital Spill-Overs within the Workplace

29 Pages Posted: 4 Dec 2001

See all articles by Harminder Battu

Harminder Battu

University of Aberdeen - Business School and CELMR

Clive R. Belfield

Columbia University Teachers' College - National Center for the Study of Privatization in Education

Peter J. Sloane

University of Wales, Swansea; IZA Institute of Labor Economics

Date Written: November 2001

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's 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.

Keywords: Educational Economics, Human Capital, Workplace Performance

JEL Classification: I2, J4

Suggested Citation

Battu, Harminder and Belfield, Clive R. and Sloane, Peter J., Human Capital Spill-Overs within the Workplace (November 2001). IZA Discussion Paper No. 404. Available at SSRN: https://ssrn.com/abstract=292843

Harminder Battu

University of Aberdeen - Business School and CELMR ( email )

Edward Wright Building
Dunbar Street
Old Aberdeen AB24 3QY
+44 12 2427 2718 (Phone)

Clive R. Belfield

Columbia University Teachers' College - National Center for the Study of Privatization in Education ( email )

525 W. 120th St.
New York, NY 10027
United States

Peter J. Sloane (Contact Author)

University of Wales, Swansea ( email )

Singleton Park
Swansea, Wales SA2 8PP
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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