Human Capital in the UK (ONS)
From Wikiprogress.org
Contents |
Introduction
For over three centuries economists have been interested in valuing the productive capacity of the workers in an economy. Despite advances in accounting systems, present day national accounts are still considered by some to be limited in their analysis of human capital. Recognising this, the Atkinson Review (Atkinson, 2005) and the Commission on the Measurement of Economic Performance and Social Progress (CMEPSP, 2009) recommended the development of measures of the stock of human capital. The capitals approach to measuring well-being advocated by the Department for Environment, Food and Rural Affairs (DEFRA) and the Social Impacts Taskforce (Harper and Price, 2011), requires estimates of human capital. Similarly, there is international acceptance of the need to improve measures of human capital and the Office for National Statistics (ONS) is a member of an international consortium developing such measures.
Thus, measures of human capital are an important contribution to the measuring National Well-being agenda and are one of ONS proposed indicators of National Well-being (ONS, 2011a).
ONS' human capital estimates
The ONS has developed experimental estimates of the UK’s human capital stock using the lifetime labour income approach. The methodology has been applied to data from the Labour Force Survey to produce estimates of the UK's human capital stock between 2001 and 2010 inclusive.
The key findings are that using a discounted lifetime labour income approach and assuming a discount rate of 3.5 per cent and labour productivity growth rate of two per cent, the UK’s human capital stock was worth £17.12 trillion in 2010. This is more than two-and-a-half times the UK National Accounts estimated value of the UK's tangible assets - buildings, vehicles, plant and machinery etc - at the beginning of 2010. The estimated value of the UK's human capital stock in 2010 was £130 billion lower than the estimate for the human capital stock in 2009 (ONS, 2011b).
See also
The UK's Measuring National Well-being Programme
