Quality Adjusted Human Capital Index 1976-2013

The human capital variable is considered primary source of economic growth in the literature of endogenous growth models and it is supported by several empirical researches. In these studies the human capital variable is incorporated to the model as quantity and quality while quality is measured by the average years of education. This study aims at simply calculating the human capital quality from a wider perspective. Therefore, a data set including 80 countries duration of 1976-2013 and two indices from this data set are formed. Ten variables are chosen which are considered to be related with human capital quality and in order to make them independent from unit they all are standardized. In order to receive better results oil rich countries are excluded from the data set. The first index is calculated by principal components analysis and the second index calculated by arithmetic mean method. The findings obtained from indices supports the each other. The net result of the observed period, it has been provided serious increases human capital quality in countries such as South Korea, Hong Kong, Singapore, China, Thailand, Malaysia and Mexico. For instance, in 1976 South Korea was ranked 22th in the index, however, in 2013 she placed in the first; Singapore increased from 23th to 12th and China increased from 71th to 29th. When it comes to developed countries, it can be conferred that all these countries stabled within the first 20 and except for minor changes they did not show any radical increase or decrease througout the period.