Abstract
In the over 25 years since Jorgenson and Fraumeni (1989) published their first article integrating human capital measures with the national accounts, the Bureau of Economic Analysis's (BEA's) U.S. National Income and Product Accounts (NIPAs) and U.S demographics have changed significantly. The original paper is a national income accounting paper with production and factor outlay, income, receipt and expenditure, capital accumulation, and wealth accounts in current and constant prices. In this paper, we update the Jorgenson‐Fraumeni human capital estimates and integrate them into the latest NIPA accounts. A comparison of the aggregates for the U.S. and their trends between the earlier 1949–19 period and later 1998–2009 period is informative. The benefit from integrating human capital components into BEA's NIPA over a long historical time period allows us to quantify the impact of the end to the gains in average educational attainment, changes in female labor force participation, and the possible impact of the greying of America.
Highlights
The paper is a national income accounting paper with production and factor outlay, income, receipt and expenditure, capital accumulation, and wealth accounts. All of these accounts are tied to the NIPAaccounts, and supplemented with human capital estimates
J-F estimates for Argentina and China were independently constructed as well as new estimates for the United States, bringing J-F country coverage to 20.1 Interest in human capital measurement continues to the present, with a report on OECD practices (OECD, 2012), a UNECE Task Force (Statistics Norway, 2014), and World Bank and UN reports on wealth (World Bank, 2010 and UNU-IHDP and UNEP, 2014), which both featured human capital
Without looking at a set of national accounts with integrated human capital components, researchers, analysts, and policy-makers will have an incomplete picture of economic growth
Summary
Australia, Canada, China, Denmark, France, Great Britain, India, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Poland, Rumania, South Korea, Spain, Sweden, and the United States. The stock of human capital in a given year is equal to the sum of lifetime income across a population, weighted by population by age, sex, and education: hcy = s a e (py,a,s,e × iy,a,s,e) where py,a,s,e is the population in year y of people of age a, sex s, and level of education e Note that this is computed using market, nonmarket, or combined lifetime income. The 1998-2009 results include an additional component of investment, residual net investment This is the impact of measured changes in the size and distribution of the population by sex, age, and education that cannot be attributed to measured births, deaths, or schooling. The accumulation accounts are related to the wealth accounts through the accounting identity between period-to-period changes in wealth and the sum of net saving and the revaluation of assets
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