A new aggregate measure of human capital: Linking education policies to productivity through PISA and PIAAC scores by Balázs Égert, Christine de La Maisonneuve, David Turner published by VOXEU (4/2022).
Investing in education and human capital is an important ingredient for economic growth. This column constructs a new aggregate stock measure of human capital data using OECD data on adult skills, quality of education, and mean years of schooling. The relative weights of quality and quantity are estimated rather than imposed, as they are in the existing literature. Improvements in human capital are estimated to boost productivity significantly, but only with long lags. Furthermore, simulating the impact of pre-primary education on human capital and productivity demonstrates the usefulness of the new measure for policy analysis.