Measuring the UK's human capital stock

Abstract

Estimates of the UK's stock of human capital are derived by applying a lifetime labour income methodology to data from the UK Labour Force Survey. The results show that using an annual discount rate of 3.5 per cent and assuming annual labour productivity growth of 2 per cent, the market value of the UK's human capital stock in 2009 was 16,686 billion. This is more than two-and-a-half times the Blue Book estimate of the Net Worth of the UK for the same year and 2,703 billion higher than the estimate for the human capital stock in 2001. In 2009, the average human capital stock per head of working age population was 419,326. This is 46,797 higher than in 2001 but only 717 higher than in 2007. Less time in paid employment over their lifetime and lower average labour market earnings means that the total market value of women's human capital 6,481 billion was around 63 per cent of men's 10,206 billion. In 2009, one-third of the human capital stock was embodied in the 21.7 per cent of the working age population whose highest educational attainment was a degree or equivalent.