Financial support of the Marsden Fund under grant UOC108 aided completion of this paper. We are grateful to participants at the New Zealand Association of Economists Conference, Wellington, June 2002, seminar audiences at the New Zealand Treasury, New Zealand Ministry of Economic Development and the Reserve Bank of New Zealand, Dorian Owen, and two anonymous referees for helpful comments.
A FORWARD-LOOKING MEASURE OF THE STOCK OF HUMAN CAPITAL IN NEW ZEALAND*
Article first published online: 16 AUG 2006
The Manchester School
Volume 74, Issue 5, pages 593–609, September 2006
How to Cite
LE, T., GIBSON, J. and OXLEY, L. (2006), A FORWARD-LOOKING MEASURE OF THE STOCK OF HUMAN CAPITAL IN NEW ZEALAND. The Manchester School, 74: 593–609. doi: 10.1111/j.1467-9957.2006.00511.x
Manuscript received 8.6.04; final version received 4.1.06.
- Issue published online: 16 AUG 2006
- Article first published online: 16 AUG 2006
Human capital is increasingly believed to play an important role in the growth process; however, adequately measuring its stock remains controversial. Because the estimated impact that human capital has on economic growth is sensitive to the measures or proxies of human capital, accurate and consistent measures are needed. While many measures of human capital have been developed, most rely on some proxy of educational experience and are thus plagued with limitations. In this study, we modify the lifetime labour income approach outlined by Jorgenson and Fraumeni (The Measurement of Savings, Investment and Wealth, Chicago, IL, University of Chicago Press, 1989, pp. 227–282; Output Measurement in the Services Sector, Chicago, IL, University of Chicago Press, 1992, pp. 303–338) to estimate the monetary value of the human capital stock for New Zealand. Based on data from the New Zealand Census of Population, we find that the country's working human capital grew by half between 1981 and 2001, mostly due to the rise in employment level. This stock of human capital was also well over double that of physical capital in all the census years studied.