A National Accounts Satellite for Human Capital and Education

30 Pages Posted: 30 Sep 2011 Last revised: 13 Dec 2011

See all articles by Frits Bos

Frits Bos

CPB Netherlands Bureau of Economic Policy Analysis

Date Written: September 29, 2011

Abstract

The official national accounts statistics do not show the role of human capital in the national economy. A set of satellite tables supplementing the standard national accounts statistics could serve this data need. In this satellite account, expenditure on education and training are recorded as human capital formation. This includes not only the expenditure on primary, secondary and tertiary education, but also expenditure on training and courses by employers and the earnings foregone by students. Consumption of human capital is allocated to various persons and industries as a charge on their income; it is not part of final consumption expenditure. The satellite shows more comprehensively than OECD Education at a Glance who pays for human capital formation. It also shows how education and training are employed in the national economy. In line with calculations of private and social rates of return, taxes and subsides on labour income and the relative prices of various types of labour (high-skilled, medium-skilled, low-skilled) are also shown. Links could be made with labour accounts broken-down by level of education, productivity and growth accounts and tables on expenditure by function of government, households and corporations. A simple decomposition analysis can show the role of demography and participation rates in the development of public expenditure on education. The satellite could be regarded as a macroeconomic framework supplementing the OECD-statistic Education at a Glance.

Keywords: Human capital, education, economic growth, public expenditure on education

JEL Classification: C82, E01, H52, I20, O15

Suggested Citation

Bos, Frits, A National Accounts Satellite for Human Capital and Education (September 29, 2011). Available at SSRN: https://ssrn.com/abstract=1935369 or http://dx.doi.org/10.2139/ssrn.1935369

Frits Bos (Contact Author)

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

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