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Human Capital

Andri Wijanarko,SE,MEandri_wijanarko@yahoo.com

Labor Economics Series

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Chinese Proverb

Give a man a fish and you feed him for one day

Teach a man to fish and you feed him for a lifetime

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Pendidikan

Lulus SMU

SD

SMP SMU

?Mencari jenjang pendidikan lebih tinggi

4

Pasca SMU

Menikah

BekerjaKuliah

5

Mengapa Kuliah ?

Disuruh orang tua

Alasan

Ekspektasi pendapatan

Ikut-ikutan

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Basic Concept

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Human CapitalDefinition

acquired skills to entering labor market.

• Unique set of abilities and acquired skills

Assumption• Maximizes the present value of

lifetime earnings

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InvestmentEhrenberg &Smith :

• Entail an initial cost that one hopes to recoup over some periode of time

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Three Major kinds of Labor Market Investment

Ehrenberg &Smith :

1. Education and Training

2. Migration

3. Search for the new jobs

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Three Major kinds of Labor Market Investment

All three investment involve an initial cost, and all three are made in the hope and expectation that the investment will pay off well into the future

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Three Major kinds of Labor Market Investment

The Knowledge and Skills a worker has generate a certain stock of productive capital

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Three Major kinds of Labor Market Investment

Job search and Migration are activities that incerase the value of one’s human capital by ncreasing the price (wage) received for a given stock of skills

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Three Stages of Human Capital Investment

A. Early Childhood The acquisition of human

capital is largerly determined by decisions of others :

• Parental resources and guidances

• Cultural environment• Early schooling experiences

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Three Stages of Human Capital Investment

B. Teenagers and young adult

• Full time students in a high school, college or vocational training program

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Three Stages of Human Capital Investment

C. Entering labor market

• On-the-job training• Formal traning

program

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HIGHEST GRADE COMPLETED(USA 1996 - Percent of Population in Education Category)

GROUPLess than

high School

High School Graduates

Some College

Associate Degree

Bachelor Degee

Advance Degree

All Person 18.3 33.6 17.3 7.2 15.8 7.8

GenderMaleFemale

18.118.4

31.935.1

17.417.3

6.67.8

16.415.1

9.56.2

RaceWhiteBlackHispanic

17.225.746.9

33.935.126.0

17.318.813.2

7.36.73.6

16.110.06.6

8.13.62.6

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LABOR MARKET CHARACTERISTICS BY EDUCATION GROUP (ALL-WORKER-1996)

USA Less than high School

High School Graduates Some College College

Graduates

Labor Force Participation Rate

60.2% 77.9% 83.7% 87.8%

Unemployment Rate 10.9% 5.5% 4.1% 2.2%

Annual Earnings US$ 17.430 US$ 24.248 US$ 29.096 US$ 46.552

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Investment : Present Value

• Keputusan Investasi : Gain antara “Current Cost” dan “Future Returns”

• Fakta : terdapat perbedaan nilai antara saat ini dengan yang akan datang

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Present Value

Present Value allows us to compare payment amount spent and received in different periods

r

yPV

1Note :

y Future Value

r Rate of Interest

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Present Value

The quantity Present Value (PV) tells us how much needs to be invested today in order have y dollars next year

Period 0 1 2 3 4 5

Value 100.000 110.000 121.000 133.100 146.410 161.051

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Schooling Model

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• Workers acquire the skill level that maximizes the present value of lifetime earnings

Schooling Model

• Education and other forms of training, therefor, are valued only because they increased earnings

Maximizes Utility

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Age-Earning ProfileUpah

Usia

18 65

USMU

22

- U

UKUL

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• Biaya melanjutkan pendidikan H• Asumsi : Highly educated more

productive• Employer membayar wage wCOL

untuk “mengganti” biaya pendidikan.

• Worker akan melanjutkan pendidikan bila wHS < wCOL

Age-Earning Profile

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Present Value of Age-Earning Profile

Present Value lulusan SMU (bekerja usia 18-64 th):

462 )1(...

)1()1( r

w

r

w

r

wwPV SMUSMUSMU

SMUSMU

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Present Value of Age-Earning Profile

Present Value melanjutkan pendidikan :

PendidikannMelanjutkaBiaya

KUL r

H

r

H

r

HHPV

32 )1()1()1(

PendidikannMelanjutkaSetelahnPenghasila

KULKULKUL

r

w

r

w

r

w4654 )1(

...)1()1(

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Present Value of Age-Earning Profile

Contoh :• Asumsi : worker hanya bekerja selama 2

tahun• Earning lulusan SMU : Rp 100.000

rPVSMU

1

000.100000.100

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• Bila melanjutkan pendidikan 1 th, kemudian bekerja dengan earning Rp 250.000 dan biaya pendidikan Rp 40.000

Present Value of Age-Earning Profile

rPVKUL

1

000.250000.40

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Bila Interest : 5% maka :

Present Value of Age-Earning Profile

238.195238.95000.10005,01

000.100000.100

SMUPV

095.198095.238000.4005,01

000.250000.40

KULPV

Karena PVSMU < PVKUL : Worker melanjutkan pendidikan

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Bila Interest : 10% maka :

Present Value of Age-Earning Profile

Karena PVSMU > PVKUL : Worker tidak melanjutkan pendidikan

909.190909.90000.1001,01

000.100000.100

SMUPV

273.187273.227000.401,01

000.250000.40

KULPV

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• Rate of Interest (rate of discount) berpengaruh terhadap keinginan melanjutkan pendidikan, dapat berupa market rate of interest.

• Rate of Discount also depends on how we feel about giving up some of today’s consumption in return for future rewards.

• Present Oriented Worker higher rate of discount

Present Value of Age-Earning Profile

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The Wage-Schooling Locus

• Wage-Schooling Locus menggambarkan tingkat upah yang dibayarkan employer untuk tingkat pendidikan tertentu.

• Ditentukan oleh juga equilibrium pasar (Supply & Demand)

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The Wage-Schooling LocusDollars

Years of Schooling12 13 14

20.000

23.000

25.000

18

28.000

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Rata-rata Upah Pekerja Pria Th. 2005

896.538

332.925434.955

521.409640.983

731.785

956.579 979.182

1.204.205

1.446.329

1.717.029

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

1.800.000

Rata-ra

ta

Tdk/B

lm Per

nah Sek

olah

Tdk/B

lm Ta

mat SD S D

SMTP Umum

SMTP Keju

ruan

SMTA Umum

SMTA Keju

ruan

Diploma I/II

Akade

mi/Dip.

III

Univers

itas

Sumber  : BPS, Sakernas Tahun 2005

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Rata-rata Upah Pekerja Wanita Th. 2005

634.378

187.142 224.856290.716

453.083 475.690

676.002769.514

998.3901.060.401

1.207.982

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

Rata-ra

ta

Tdk/B

lm Per

nah Sek

olah

Tdk/B

lm Ta

mat SD S D

SMTP Umum

SMTP Keju

ruan

SMTA Umum

SMTA Keju

ruan

Diploma I/II

Akade

mi/Dip.

III

Univers

itas

Sumber  : BPS, Sakernas Tahun 2005

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The Marginal Rate of Return to School

• Slope of the wage-schooling locus (w / s) menyatakan peningkatan earnings yang diterima apabila melanjutkan pendidikan.

• Menyatakan persentase peningkatan earnings untuk setiap peningkatan educational investment.

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The Marginal Rate of Return to School

Stage 1

Peningkatan $3.000 ($20.000 $23.000) karena menambah waktu pendidikan 1 th (12 tahun menjadi 13 tahun).

Peningkatan : %15%100000.20

000.3

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The Marginal Rate of Return to School

Stage 2

Peningkatan $2.000 ($23.000 $25.000) karena menambah waktu pendidikan 1 th (13 tahun menjadi 14 tahun).

Peningkatan : %7,8%100000.23

000.2

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Peningkatan semakin kecil Stage 1 = 15 % Stage 2 = 8,7 %

The Marginal Rate of Return to School

Worker stop schooling bila : The Marginal Rate of Return to

Schooling = Rate of Discount

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The Schooling DecisionRate of Discount

Years of Schooling

r

MRR

s’

r’

s’’

r = MRR

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On The Job Training

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On-the-job training merupakan salah satu aspek penting dalam worker’s human capital stock.

Jacob Mincer : OJT memberikan kontribusi hingga separuh dalam proses pembentukan human capital.

On-The-Job Training

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On-The-Job Training

Worker bekerja untuk 2 periode maka profit-maximizing (tanpa training) :

r

VMPVMP

r

TCTC

112

12

1

TC Total Labor Cost

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On-The-Job Training

Apabila rekruitment dilakukan dengan On-The-Job Training maka :

r

VMPVMP

r

wwH

112

12

1

H Biaya training

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On-The-Job Training

GENERAL TRAINING

Skill & knowledge dapat digunakan di firm lain.

Training period : w1 = VMP1 - H

Posttraining : w2 = VMP2

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On-The-Job Training

GENERAL TRAINING

Firms provide general training, therefor, only if they don’t pay any of the costs.

Wage masa training rendah karena untuk H

Mempertahankan worker : w1 < w2

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On-The-Job Training

SPECIFIC TRAINING

Skill & knowledge tidak dapat/tidak mudah digunakan di firm lain (not portable).

merupakan alternative wage (other firms)w

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On-The-Job Training

SPECIFIC TRAININGFirm akan mendapat gain : w2 < VMP2 ,

namun beresiko worker keluar firm menginginkan jaminan worker tidak keluar dari firm

Bila worker “pays” for the spesific training w1 rendah menginginkan jaminan tidak dikeluarkan dari firm karena skill dari spesific training tidak portable.

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On-The-Job Training

SOLUTION FOR SPECIFIC TRAINING

w < w2 < VMP2

Firm dan worker share the return from spesific training.

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Penduduk usia 15 tahun yang mencari kerja

di Surabaya Th.2003

106910

131859

6927673968

87014 85404

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

1998 1999 2000 2001 2002 2003

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16.118

98.558

18.055

79.114

8.049

135.257

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

2000 2001 2002

Kesempatan Kerja Pencari Kerja

Perbandingan Pencari Kerja dan Lapangan Kerja di DKI Jakarta

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Kompetensi Sarjana

ORAL COMMUNICATION

WRITTEN COMMUNICATION

Knowledge of Field Knowledge of Technology

Ability to Work Independently

Ability to Work in Team SettingLogical Skill

Analytical Skill

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See you next time…