Net Investment and Stocks of Human Capital in the United States, 1975-2013

This study continues the research initiated in Christian (2010, 2014) on measurement of human capital stocks and investment in the United States. It measures a series of human capital stock and net investment from 1975 to 2013, using the lifetime earnings approach of Jorgenson and Fraumeni (1989, 1992). The series decomposes net investment into investment from births, investment in education net of aging of persons enrolled in school, depreciation from aging of persons not enrolled in school, depreciation from deaths, and a residual term that includes net migration and measurement error. The study also discusses the cost-based approach of measurement in human capital of Kendrick (1976), compares investment in education between the cost and income approaches, and describes the necessary steps for producing a cost-based series of human capital in the United States.