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education and (e.g. unemployed people), sample sizes in Table 3.3
training. limit validity of results.
j) Average duration of Annual hours of training Qualifies indicator h) by showing quantity of Hours of training available from IALS. Figure 3.4
job-related training. undertaken  i) per person with investment rather than just the percentage of European Labour Force Survey classifies and Table A3.4
any training ii) average for all employees making some investment. participation by length of course. in the Annex
employees.
HUMAN CAPITAL INVESTMENT  AN INTERNATIONAL COMPARISON
50
INVESTMENT IN HUMAN CAPITAL
NOTES
1. In spite of rising unemployment, it is not clear that there has been a general tendency across countries to move from
passive measures which provide financial supports for unemployed workers, to active measures designed to improve
the skills and competencies of workers and support the search process in the labour market.
2. Australia, Belgium (Flanders), Canada, Ireland, the Netherlands, New Zealand, Poland, Sweden, Switzerland (French
and German speaking), the United Kingdom and the United States.
3. It should be noted that due to sampling size, the averages and ranges for the unemployed and inactive populations
in Table 3.3 are based on some figures that are not statistically significant.
4. Excluding Italian-speaking cantons.
REFERENCES
EUROSTAT (1997), Labour Costs, 1992, Principal Results, Luxembourg.
HAVEMAN, R. and WOLFE, B. (1995),  The determinants of children s attainments: A review of methods and findings , Journal
of Economic Literature, pp. 1829-1878, December.
OECD (1991), Employment Outlook, Paris.
OECD (1993), Employment Outlook, Paris.
OECD (1996a), Education at a Glance  Analysis, Paris.
OECD (1996b), Education at a Glance  OECD Indicators, Paris.
OECD (1997a), Employment Outlook, Paris.
OECD (1997b), Education Policy Analysis, Paris.
OECD (1997c), Education at a Glance  OECD Indicators, Paris.
OECD (1997d), Information Technology Outlook, Paris.
OECD, Human Resources Development Canada and Statistics Canada (1997), Literacy Skills for the Knowledge Society  Further
Results from the International Adult Literacy Survey, Paris.
51
4
RETURNS TO INVESTMENT IN HUMAN CAPITAL
1. BENEFITS, COSTS AND RETURNS
Human capital investment confers benefits on individuals, enterprises and
societies. These benefits may be economic in nature and accrue in the form of
additional earnings, productivity or economic growth. Human capital investment
can also give rise to a wide range of non-economic benefits including greater
social cohesion, lower crime and better health.
The widespread acknowledgement of the benefits of education and other The costs and benefits
forms of learning should not lead governments and others to invest of alternative investments
indiscriminately in human capital. In deploying finite resources, they need to in human capital need
know which forms of investment produce the best value for money. This to be compared...
calculation has to take account of the postponement of returns, often over long
periods after the investment has been made. To calculate the economic return,
the cost of investments should be examined alongside the value of future
benefits   discounted to take account of their postponement. To compare
alternative investments, this information can be combined to produce in each
case an annual  rate of return .
The difficulty in calculating rates of return on human capital investments
is that even though some of the costs can be identified (see Chapter 3 above),
it is hard to attribute, quantify and value the benefits that result, for two main
reasons. First, while average benefits to individuals in terms of increased
earnings and employment prospects are often clear, it is not always as easy to
quantify benefits to society  which are highly relevant given that the cost of
the investment is often borne in large part by public money.
... calculating returns is difficult,
Second, it is easier to look at the relative prospects on average of a person
because collective benefits are
with a particular level of initial education than to do the same according to
hard to measure and individual
further investment over the lifecyle, because such investment is more
benefits cannot readily be
heterogeneous in its nature, and its benefits are less generalised. So, information
attributed to specific investments
on returns tends to be skewed towards the benefits of formal education and
over the lifecycle.
training. Such data neglect deletes one of the fundamental characteristics of
human capital, discussed in Chapter 1 above  its progressive accumulation 53
HUMAN CAPITAL INVESTMENT  AN INTERNATIONAL COMPARISON
over a lifetime. A company whose capital accounts looked only at its founding
investment, and not at depreciation or subsequent investments, would report
a highly inaccurate rate of return on capital employed.
This chapter reviews, in the following section, evidence of the benefits to
investment in human capital. It starts with the easiest to measure benefit: the
employment and earnings gain from higher levels of educational attainment. It
then looks at new evidence comparing the importance of attainment in this
respect relative to that of directly measured skills. What is more difficult is
systematically to attribute economic benefits specifically to episodes of
investment in such skills, for example through enterprise-based training or
public labour market programmes, but dispersed evidence does exist. A further [ Pobierz całość w formacie PDF ]