This new work breaks ground by emphasising more than financial capital, and that is important because many forms of capital drive growth. In the process it also emphasises vulnerabilities: mineral resources don’t last forever for example, whereas high human capital is associated with high growth.
No it isn’t. The currently rich countries have high human capital. The currently poor countries have low. The poor countries grow faster than the rich.
The association is that high human capital is correlated with past economic growth, not high future such.
It gets worse of course:
Measures are useful for three reasons. The first is comparison. The second is comprehension. The third is as the basis for decision making. What this says is that the best investment in the world is in people. And questions immediately follow, not least as to why so many barriers to education now exist in the UK in the form of student debt, and why have we been so opposed to student migration?
The World Bank’s measure explicitly excludes years of schooling as a measure. Instead:
Human capital wealth is measured for the first time as the present value
of the future earnings of the labor force using household surveys for 141
countries. Human capital is often interpreted to include, among other factors,
the years of schooling of the population, the actual learning taking
place in school and after leaving school, and health investments. In this
book the measure of human capital is based on the present value of the
expected earnings of the labor force, a measure that is consistent with the
concept of capital used for other assets. This measure factors in not only
the number of years of schooling completed by workers, but also the earnings
gains associated with schooling (which implicitly factors in the quality
of the learning taking place in school) and how long workers can work
(which implicitly accounts for health conditions through life expectancy,
The capitalisation of the extra income stream from the education, not the years of it. And given that an arts degree for a male in the UK, on average of course, is a net loser in income for the student that means that a healthy chunk of university education in the UK subtracts from national wealth.
Which is why we have a loan system to fund it. In the hope that the 18 year olds will have enough nous not to do degrees which lower their lifetime income.