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Measuring the stock of human capital in New Zealand

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  • Van Trinh, Le Thi
  • Gibson, John
  • Oxley, Les

Abstract

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 of human capital are needed. While many measures of human capital have been developed, most rely on some crude proxy of educational experience and are thus plagued with limitations. In this study, we adopt the lifetime labour income approach outlined by Jorgenson and Fraumeni [D.W. Jorgenson, B.M. Fraumeni, The accumulation of human and non-human capital, 1948–1984, in: R.E. Lipsey, H.S. Tice, The Measurement of Savings, Investment and Wealth, The University of Chicago Press, Chicago, IL, 1989, pp. 227–282; D.W. Jorgenson, B.M. Fraumeni, The output of the education sector, in: Z. Griliches (Ed.), Output Measurement in the Services Sector, The University of Chicago Press, Chicago, IL, 1992, pp. 303–338] to measure the monetary value of the stock of human capital for New Zealand. Jorgenson and Fraumeni's method is innovative in that it simplifies the estimation process, as well as taking into account the potential value of current schooling in addition to that of past schooling. Based on data from the New Zealand Census of Population, we find that the human capital stock of the country's employed work force grew by half between 1981 and 2001, mostly due to the rise in employment level.

Suggested Citation

  • Van Trinh, Le Thi & Gibson, John & Oxley, Les, 2005. "Measuring the stock of human capital in New Zealand," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 68(5), pages 484-497.
  • Handle: RePEc:eee:matcom:v:68:y:2005:i:5:p:484-497
    DOI: 10.1016/j.matcom.2005.02.007
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    References listed on IDEAS

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    Cited by:

    1. Ellen R. McGrattan & Edward C. Prescott, 2012. "The Labor Productivity Puzzle," Book Chapters,in: Lee E. Ohanian & John B. Taylor & Ian J. Wright (ed.), Government Policies and the Delayed Economic Recovery, chapter 6 Hoover Institution, Stanford University.
    2. Randy A. Becker & John Haltiwanger & Ron S. Jarmin & Shawn D. Klimek & Daniel J. Wilson, 2006. "Micro and Macro Data Integration: The Case of Capital," NBER Chapters,in: A New Architecture for the U.S. National Accounts, pages 541-610 National Bureau of Economic Research, Inc.
    3. Baruch Lev & Suresh Radhakrishnan & Weining Zhang, 2009. "Organization Capital," Abacus, Accounting Foundation, University of Sydney, vol. 45(3), pages 275-298.
    4. repec:wsi:serxxx:v:54:y:2009:i:03:n:s0217590809003392 is not listed on IDEAS
    5. Alexander Murray, 2016. "Partial versus Total Factor Productivity: Assessing Resource Use in Natural Resource Industries in Canada," CSLS Research Reports 2016-20, Centre for the Study of Living Standards.
    6. Ellen McGrattan, 2016. "Intangible Capital and Measured Productivity," 2016 Meeting Papers 62, Society for Economic Dynamics.
    7. Barbara M. Fraumeni, 2015. "Choosing a Human Capital Measure: Educational Attainment Gaps and Rankings," NBER Working Papers 21283, National Bureau of Economic Research, Inc.
    8. repec:bla:revinw:v:63:y:2017:i::p:s381-s410 is not listed on IDEAS
    9. Ellen McGrattan & Edward Prescott, 2006. "Why Did U.S. Market Hours Boom in the 1990s?," NBER Working Papers 12046, National Bureau of Economic Research, Inc.
    10. Barbara M. Fraumeni & Michael S. Christian & Jon D. Samuels, 2015. "The Accumulation of Human and Nonhuman Capital, Revisited," NBER Working Papers 21284, National Bureau of Economic Research, Inc.
    11. Najah Attig & Sean Cleary, 2014. "Organizational Capital and Investment-Cash Flow Sensitivity: The Effect of Management Quality Practices," Financial Management, Financial Management Association International, vol. 43(3), pages 473-504, September.
    12. Buhui Qiu & Teng Wang, 2017. "Does Knowledge Protection Benefit Shareholders? Evidence from Stock Market Reaction and Firm Investment in Knowledge Assets," Finance and Economics Discussion Series 2017-012, Board of Governors of the Federal Reserve System (U.S.).
    13. Li, Haizheng & Liu, Qinyi & Li, Bo & Fraumeni, Barbara & Zhang, Xiaobei, 2014. "Human capital estimates in China: New panel data 1985–2010," China Economic Review, Elsevier, vol. 30(C), pages 397-418.
    14. Felix Roth & Anna-Elisabeth Thum, 2013. "Intangible Capital and Labor Productivity Growth: Panel Evidence for the EU from 1998–2005," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(3), pages 486-508, September.
    15. Hannu Piekkola, 2016. "Intangible Investment and Market Valuation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(1), pages 28-51, March.
    16. Haizheng Li & Barbara M. Fraumeni & Zhiqiang Liu & Xiaojun Wang, 2009. "Human Capital In China," NBER Working Papers 15500, National Bureau of Economic Research, Inc.
    17. Hyunbae CHUN & MIYAGAWA Tsutomu & Hak Kil PYO & TONOGI Konomi, 2015. "Do Intangibles Contribute to Productivity Growth in East Asian Countries? Evidence from Japan and Korea," Discussion papers 15055, Research Institute of Economy, Trade and Industry (RIETI).

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    Keywords

    Human capital; Monetary value; Forward-looking;

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