Education brings many benefits, among them economic ones: the knowledge and capacities obtained by students and trainees allow them to contribute productively, with the advanced skills needed to fuel our modern economies that rely on specialized services and technologies. The essential role of education in building strong societies is recognized by its inclusion throughout the Sustainable Development Goals, especially in Goal 4 which is dedicated to education and training for all. The importance of education and training has been highlighted as the Covid-19 pandemic has led to the closure of schools, colleges and universities around the world.
The contribution of human knowledge and skills to economies—known to economists as human capital—is large and undeniable, yet extremely hard to quantify. But only by trying to quantify it can we determine whether or not our societies are investing wisely; to see whether the payback merits the resources paid out on the expensive endeavour of educating our countries’ citizens. As the UK’s Chancellor of the Exchequer (finance minister) put it “we currently understand more about the economic pay-back from investing in our infrastructure than we do about investment in our people”, and a more sophisticated understanding is needed “so that future investment can be better targeted”.
Following the publication of the UNECE Guide on Measuring Human Capital in 2016, some countries have been attempting to do just this. A task force of international experts has drawn together the experiences of pilot tests conducted in Norway, the UK, Canada, Israel and Belarus to develop guidance for embarking on such measurement, taking into account wide diversity across countries in economic circumstances and data availability. Their findings and recommendations are presented in the new
Satellite Account for Education and Training: Compilation Guide. An important contribution of the guide is to help countries construct internationally-comparable estimates of their expenditure on education and training and how these are financed. The pilots revealed that compilation of the satellite account depends upon coordinated work across a wide range of data compilers, including those producing national accounts, statistics on government expenditure, household surveys, trade-in-services and education statistics, as well as classification experts.
The pilot testing enabled the participating countries to identify which data sources align, and which need to be strengthened. While data on official education is widely available, all the pilot tests indicated challenges with the availability of data to estimate expenditures on non-formal and informal training, such as in-house training and online training. In-house training, provided by enterprises themselves, can constitute a significant part of total expenditures on education and training: the pilots found that its contribution ranged from one per cent in Israel and Belarus to 20 per cent in Canada. An important avenue for future work is to develop reliable data sources and methods to estimate it.
The international effort to improve statistical methods for measuring education and training fits into a broader global endeavour to update the System of National Accounts—the set of standards used across the world to measure economic performance. National Statistical Offices and International Organizations are working together to find ways to expand traditional measures of economies to areas such as well-being and sustainability, including health, education and human capital, which are increasingly seen as fundamentally important but which pose significant challenges for measurement.