An Alternative Measure of Human Capital Stock
An integrated approach for estimating the stock of human capital in the United States is developed which eliminates well known problems associated with both the cost and income based methods currently in use. Historical information on the cost of the educational investment made in base entrants (individuals who enter the full time labor force immediately following high school graduation) and the wage rate they receive upon entry into the work force is used to compute a rental rate for human capital. The human capital stock for other cohorts of the work force is then estimated using that rental rate and the reported earnings for each population subgroup. This method neutralizes the cost identification problems associated with the work of Kendrick and Eisner. It also allows a more realistic treatment of the depreciation and appreciation of human capital. When used to estimate a Cobb-Douglas production function of the U.S. economy for the period 1963-1988, this measure provided more explanatory power than hours of labor.
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- Haley, William J, 1973. "Human Capital: The Choice Between Investment and Income," American Economic Review, American Economic Association, vol. 63(5), pages 929-944, December.
- Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281-281.
- Haley, William J, 1976. "Estimation of the Earnings Profile from Optimal Human Capital Accumulation," Econometrica, Econometric Society, vol. 44(6), pages 1223-1238, November.
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- Eisner, Robert, 1989. "The Total Incomes System of Accounts," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226196381, July.
- Dale Jorgenson & Barbara M. Fraumeni, 1989. "The Accumulation of Human and Nonhuman Capital, 1948-84," NBER Chapters,in: The Measurement of Saving, Investment, and Wealth, pages 227-286 National Bureau of Economic Research, Inc.
- Geoffrey Carliner, 1982. "The Wages of Older Men," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 25-38.
- Lau, Lawrence J. & Jamison, Dean T. & Liu, Shu-Cheng & Rivkin, Steven, 1993. "Education and economic growth Some cross-sectional evidence from Brazil," Journal of Development Economics, Elsevier, vol. 41(1), pages 45-70, June.
- Polachek,Solomon W. & Siebert,W. Stanley, 1993. "The Economics of Earnings," Cambridge Books, Cambridge University Press, number 9780521367288, February.
- N. Gregory Mankiw & David Romer & David N. Weil, 1992.
"A Contribution to the Empirics of Economic Growth,"
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- N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
- Rosen, Sherwin, 1976. "A Theory of Life Earnings," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 45-67, August.
- Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352-352. Full references (including those not matched with items on IDEAS)
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