1. Human Capital
Human capital corresponds to any stock of knowledge or characteristics the worker has (either innate or acquired) that contributes to his or her productivity
OECD: the knowledge, skills, competencies embodied in individuals that facilitate the creation of personal, social and economic well-being

2. How is Human Capital accumulated
Learning within family and early childcare settings
Families contribute to the development of human capital in their children through direct expenditures on educational materials etc and through time spent fostering learning habits and attitudes
Formal education and training
This includes activities ranging from early childhood education, school-based compulsory education, post-compulsory vocational or general education, tertiary education, public labour market education, adult education etc
Workplace training
Firms and organisations invest in human capital to develop those skills and competencies with economic value
Informal learning
This is a wider concept taking place through ‘on-the-job’ learning, in daily living and through civic participation

3. Strong Human Capital Benefits of stronger human capital
Faster economic growth
More skilled/productive etc
Lower structural unemployment
Transferable skills (nb this includes moving from agriculture to industry)
Higher wages
As long as the increased productivity and output is paid to labour
Innovation
Higher education and increased knowledge means more innovation/research and development. Link to STEM
Reduction in poverty
More people have the skills to take advantage of development (can move into industry/services etc)
There ought to be positive spillover effects on labour productivity which contributes to higher trend economic growth
. A higher skilled and more flexible labour force will be better able to adjust to changing technologies and changing patterns of demand
and higher expected lifetime earnings and improved incentives to find work and reduced dependence on the welfare system.
Stronger knowledge and skills will promote invention and innovation - two further ingredients of long-term growth.
and social exclusion if more people have the skills, qualifications and competencies to remain active in an ever-changing economy

4. Importance for development
The concept of human capital has relatively more importance in labour-surplus countries. The surplus labour in these countries is the human resource available in more abundance than the tangible capital resource.
This human resource can be transformed into Human capital with effective inputs of education, health and moral values. The transformation of raw human resource into highly productive human resource with these inputs is the process of human capital formation.
The problem of scarcity of tangible capital in the labour surplus countries can be resolved by accelerating the rate of human capital formation with both private and public investment in education and health sectors of their National economies
The concept of human capital has relatively more importance in labour-surplus countries. The surplus labour in these countries is the human resource available in more abundance than the tangible capital resource. This human resource can be transformed into Human capital with effective inputs of education, health and moral values. The transformation of raw human resource into highly productive human resource with these inputs is the process of human capital formation. The problem of scarcity of tangible capital in the labour surplus countries can be resolved by accelerating the rate of human capital formation with both private and public investment in education and health sectors of their National economies.

5. Measuring Human Capital
Educational attainment
Difficult to measure so mostly years in school (used in HDI), literacy etc. Yet these have problems, eg years in school assumes all years are worth the same
The value of the inputs that enter the production of human capital (input or cost-based approach)
Spending on education
Output (typically measured by labour market income) that stems from human capital (output or income based approach)
ONS used this approach, using (discounted) lifetime earnings
In the UK they calculated the value of human capital at £17.12 trillion in 2010, or more than 2.5 times the estimated value of physical capital
In practice measures such as literacy (but not so useful in developed countries), years in school (used in HDI)
A proxy only (difficult to measure and investment in 1 person may not yield the same returns as investment in another)
The value of all future income streams, or perhaps the additional income from education
ONS estimates human capital at £17.2 trillion in 2010 in the UK based on the output measure
This is 2.5 times the value of the physical capital stock
But note the importance of health and nutrition
Note also Millenium Development Goals including universal primary education by 2015

6. Some results – UK only Human capital per capita
Distribution of human capital
35.9 per cent of the human capital stock in 2010 was embodied in the 22.6 per cent of the working age population whose highest educational attainment is a degree or equivalent. In contrast only 5.4 per cent of the human capital stock is embodied in the 22.6 per cent of the working age population who have no formal qualifications

7. More results Highest and lowest qualification over time
Average earnings by highest qualification

8. From HDI report
Average years of schooling among adults over 25 are nearly three times greater in very high HDI countries than in low HDI countries.
However, expected years of schooling, which better reflect changing education opportunities in developing countries, present a much more hopeful picture: the average incoming elementary school student in a low HDI country is expected to complete 8.5 years of school, about equal to the current years of schooling among adults in high HDI countries (8.8 years).
Overall, most low HDI countries have achieved or are advancing towards full enrolment in elementary school and more than 50% enrolment in secondary school.

9. Current HDI HDI Life expectancy Mean years school
Expected years school
GNI per capita
Arab States
0.652 71 6
10.6
8,317
East Asia and the Pacific
0.683
72.7
7.2
11.8
6,874
Europe and Central Asia
0.771
71.5
10.4
13.7
12,243
Latin America and the Caribbean
0.741
74.7
7.8
10,300
South Asia
0.558
66.2
4.7
10.2
3,343
Sub-Saharan Africa
0.475
54.9
9.3
2,010
Very high human development
0.905
80.1
11.5
16.3
33,391
High human development
0.758
73.4
8.8
13.9
11,501
Medium human development
0.64
69.9
6.3
11.4
5,428
Low human development
0.466
59.1
4.2
8.5
1,633
World
0.694
70.1
7.5
11.6
10,184