Lifetime Income and Human Capital

Abstract

In this paper we present a new accounting system for income, saving and wealth in the form of human capital for the United States. The most important innovations in our accounting system are these: first, our concept of human capital is based on lifetime labour incomes for all individuals in the US population. Second, we incorporate both market and non-market activities into our measures of labour incomes.1 This makes it possible to provide measures of lifetime labour incomes for individuals employed in the labour market and for individuals not involved in the labour market. Third, our measures of income, saving and wealth in the form of human capital are based on a system of demographic accounts. Fourth, we combine these accounts with economic accounts for the value of all available labour time to obtain measures of income, saving and wealth in the form of human capital for the US economy as a whole.