Guide on Measuring Human Capital

The idea of viewing individuals’ knowledge and abilities as an asset—as human capital—can be traced back to the 18th century.  But human capital is hard to define and measure. Policymakers are calling for ways to understand and quantify human capital, in order to better understand what drives economic growth and the functioning of labour markets, to assess the long-term sustainability of a country’s development path, and to measure the output and productivity performance of the educational sector. Devising a robust methodology for the monetary valuation of the stock of human capital is especially crucial as studies suggest that human capital is the most important component of the total capital stock in advanced economies.

This Guide on Measuring Human Capital discusses conceptual, methodological and implementation issues and challenges. The Guide shows how to estimate and record human capital in a way that is aligned with the principles of national accounts and that is comparable across economies.

The Guide proposes the development of a satellite account for education and training, and provides an example demonstrating the impact of human capital on the values of the gross domestic product, investment, consumption, savings and net wealth. The Guide provides additional examples of how human capital has been measured in selected country-specific contexts and compared across countries. The Guide also shows how statistical agencies can address the challenges of constructing a human capital satellite account.
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