HUMAN CAPITAL MEASUREMENT IN OECD COUNTRIES AND ITS RELATION TO GDP GROWTH AND INNOVATION

Abstract

Empirical literature finds difficulties specifying and selecting proxies for human capital. These difficulties may explain why the indicators used in several international empirical studies are not closely linked to economic growth and its sources.This study offers an innovative perspective with an international indicator of human capital that takes into account the quantitative and the qualitative dimension of the concept, through the calculation of working hours corrected by productivity on the basis of differences in educational attainment and differences in skills and knowledge which exist between countries.The study also applies Granger’s test to analyse, in a sample of 14 OECD countries, the causality between the new indicator of human capital and GDP and the new indicator and innovation, concluding that the multidimensional indicator possesses a relation of causality that does not appear when tests are carried out with traditional measures of human capital (gross enrolment rate in secondary and average schooling years).