On Valuing Human Capital And Relating it to Macro-Economic Conditions

50 Pages Posted: 31 Dec 2013 Last revised: 19 Jul 2016

See all articles by Dave Berger

Dave Berger

Oregon State University

Kuntara Pukthuanthong

University of Missouri, Columbia

Richard Roll

California Institute of Technology

Date Written: July 17, 2016


Human capital is the largest component of aggregate wealth, but its relation to other macroeconomic variables is murky due to the lack of market prices. Valuing human capital using historical costs or expected income is characterized by substantial measurement error. We develop a human capital index using slave prices and relate its dynamics to that of other indicators including equities, GDP, real estate and interest rates. The human capital values are extrapolated from the 19th Century to the modern era. Their evolution has substantial implications for our understanding of the human capital dynamics, with applications to growth and portfolio allocation.

Keywords: Human capital value, economic crisis, inflation, GDP, macroeconomics

JEL Classification: G11, G12, E44, J30

Suggested Citation

Berger, Dave and Pukthuanthong, Kuntara and Roll, Richard W., On Valuing Human Capital And Relating it to Macro-Economic Conditions (July 17, 2016). Available at SSRN: https://ssrn.com/abstract=2373371 or http://dx.doi.org/10.2139/ssrn.2373371

Dave Berger

Oregon State University ( email )

Bexell Hall 200
Corvallis, OR 97331
United States

Kuntara Pukthuanthong (Contact Author)

University of Missouri, Columbia ( email )

Robert J. Trulaske, Sr. College of Business
403 Cornell Hall
Columbia, MO 65211
United States
6198076124 (Phone)

HOME PAGE: http://https://kuntara.weebly.com

Richard W. Roll

California Institute of Technology ( email )

1200 East California Blvd
Mail Code: 228-77
Pasadena, CA 91125
United States
626-395-3890 (Phone)
310-836-3532 (Fax)

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