By Maximilian Clarke
The value of the UK’s human capital has fallen by £130bn in 2010, though remains more than two-and-a-half times as valuable as the entire UK physical assets, figures show.
The Office for National Statistics (ONS) is publishing these estimates of human capital as part of its measuring national well-being programme. There is increasing international awareness that national well-being depends upon human capital as well as natural, social and physical capital. The ONS article discusses the concept of human capital and its importance to a number of policy debates in the UK as well as measuring national well-being. It uses data from the Labour Force Survey to value the human capital of the UK’s working-age population between 2001 and 2010.
The value of the UK's human capital stock increased steadily between 2001 and 2007, averaging annual increases of £425 billion. The slowing of earnings growth and increases in unemployment during the economic downturn meant that growth in the stock of human capital slowed to an average of £120 billion per year between 2007 and 2009, before falling in 2010.
The article also looks at the distribution of human capital showing that in 2010, less time in paid employment over their lifetime and lower average labour market earnings means that the total market value of women’s human capital (£6.64 trillion) was around 63 per cent of men’s (£10.48 trillion).
Human capital was also disproportionately concentrated in those workers with the highest educational attainments. In 2010, 36 per cent of the human capital stock was embodied in the 23 per cent of the working age population whose highest educational attainment was a degree or equivalent. In contrast only 5 per cent of the human capital stock was embodied in the 23 per cent of the working age population who had no formal qualifications.
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