The estimation of Human Capital in structural models with flexible specification

Pietro Giorgio Lovaglio () and Giuseppe Folloni
Additional contact information
Pietro Giorgio Lovaglio: Dept. of Quantitative Methods, University of Bicocca-Milan
Giuseppe Folloni: Department of Economics, University of Trento

No 11, Working Papers from AlmaLaurea Inter-University Consortium

Abstract: The present paper focuses on statistical models for estimating Human Capital (HC) at disaggregated level (worker, household, graduates). The more recent literature on HC as a latent variable states that HC can be reasonably considered a broader multi-dimensional non-observable construct, depending on several and interrelate causes, and indirectly measured by many observed indicators. In this perspective, latent variable models have been assuming a prominent role in the social science literature for the study of the interrelationships among phenomena. However, traditional estimation methods are prone to different limitations, as stringent distributional assumptions, improper solutions, and factor score indeterminacy for Covariance Structure Analysis and the lack of a global optimization procedure for the Partial Least Squares approach. To avoid these limitations, new approaches to structural equation modelling, based on Component Analysis, which estimates latent variables as exact linear combinations of observed variables minimizing a single criterion, were proposed in literature. However, these methods are limited to model particular types of relationship among sets of variables. In this paper, we propose a class of models in such a way that it enables to specify and fit a variety of relationships among latent variables and endogenous indicators. Specifically, we extend this new class of models to allow for covariate effects on the endogenous indicators. Finally, an application aimed to measure, in a realistic structural model, the causal impact of formal Human capital (HC), accumulated during Higher education, on the initial earnings for University of Milan (Italy) graduates is illustrated.

Pages: 16
Date: 2011-09
New Economics Papers: this item is included in nep-ecm, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www2.almalaurea.it/universita/pubblicazioni/wp/pdf/wp11.pdf First version, 2011 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www2.almalaurea.it/universita/pubblicazioni/wp/pdf/wp11.pdf [307 Temporary Redirect]--> https://www2.almalaurea.it/universita/pubblicazioni/wp/pdf/wp11.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:laa:wpaper:11

Access Statistics for this paper

More papers in Working Papers from AlmaLaurea Inter-University Consortium
Bibliographic data for series maintained by ().