'Human capital': measuring the value people bring to the economy
Tuesday, October 1, 2019
A consultation has opened on how the Government measures the value people bring to the economy.
Referred to ‘human capital’, this concept is widely recognised as a driver of an economy or society’s productivity.
Currently human capital is measured based on earnings - what someone earns is seen as equivalent to the value they bring to the economy. However following the Spring Statement in 2018, the Chancellor of the Exchequer asked the ONS to develop a more sophisticated measure. The Government wants the new definition of it to encompass skills and knowledge.
ONS published a workplan in October 2018, setting out how it plans to do this, which included a recommendation to consider the feasibility of an indicator-based approach.
Suggested indicators could cover education, teacher shortages, parental involvement and maternal health.
This consultation represents the first of several phases in a wider review of measures of human capital. This first phase maps out a human capital measurement framework alongside potential indicators of human capital. Other phases will look to review the full list of skills and knowledge that should be captured, as well as data sources to fill them. An overview of the different phases is outlined in the consultation annex.
Consultation deadline: 11th November 2019
Consultation documents are here