Measuring Human Capital: a Survey Study

Abstract: This is a survey study about the concept of human capital and has to be considered as a collection of opinions, ideas and models. The concept of human capital can be defined, despite the difficulties, as the stock of skills and knowledge, gained through education and experience. A more detailed definition is given and a review of its historic development it is also made. The study then turns to the problem of evaluation of human beings and finds some solutions to evaluation problems that may arise. Earnings or future incomes seem to be a good approximation of human capital value. The concept of human capital is then analyzed from an economic stand point and the bonds it has with family, education, training and future incomes are analyzed. Further an explanation of the impact of parents, of the schooling system and of on the job training on the formation of human capital is also made. Other factors, especially sociological ones, are also taken in account and are considered important in influencing human capital. Thus the role of society must not be forgotten. All those issues contribute in determining one's income flows during life, as the earnings age profile shows. Differences in opportunities, depending mostly on family and public expenditures in education, and abilities, depending mostly on one's “natural talents”, are deemed as important in determining one's future incomes, direct expression of human capital.