Intangible Capital and Labor Productivity Growth: Panel Evidence for the EU from 1998–2005

Using new international comparable data on intangible capital investment by business within a panel analysis between 1998 and 2005 in an EU country sample, a positive and significant relationship between intangible capital investment and labor productivity growth is detected. This relationship proves to be robust to a range of alterations. The empirical analysis confirms previous findings that the inclusion of business intangible capital investment in the asset boundary of the national accounting framework increases the rate of change of output per hour worked more rapidly. In addition, intangible capital is able to explain a significant portion of the unexplained international variance in labor productivity growth, and becomes a dominant source of growth.     

THE ACCOUNTING TREATMENT OF HUMAN INVESTMENT AND CAPITAL

Defining investment as outlays that increase income- and output-producing capacity, the author presents estimates of human investment in the United States 1929–69, comprising rearing costs, education, training, health, safety and mobility outlays. He develops an economic accounting framework to accommodate human investments and research and development in national and sector capital accounts, with appropriate adjustments to the current accounts to provide consistency. The associated balance sheets and wealth statements are also developed.
The wealth and corresponding income estimates are used to compute rates of return on human, non-human, and total capital. In the business economy the average net rate of return on total capital was 10.6 percent in 1969, compared with 10.0 percent in 1929. The average and marginal rates of return on human capital were generally somewhat higher than on non-human capital throughout the period.     

Culture and human capital in a two-sector endogenous growth model

Recent literature in the field of cultural economics highlights a possible inversion in the usual causality relation (from economic growth to culture) and points out that culture may represent an important driver of economic growth. By viewing culture in line with Throsby’s (2001) definition of cultural capital (i.e., an asset of tangible and intangible cultural expressions), in this article we analyze one possible channel through which culture may positively affect economic growth, namely the existence of a relationship of complementarity between cultural and human capital investments. Using a two-sector endogenous growth model, we find that in the long run a higher growth rate of real per-capita income can be attained the more cultural and human capital investments are complementary for each other in the process leading to agents’ skill acquisition. We also analyze the conditions under which an increase of the cultural capital share in total GDP can be conducive to a rise of real per-capita income.     

INTANGIBLE INVESTMENT IN JAPAN: MEASUREMENT AND CONTRIBUTION TO ECONOMIC GROWTH

Following the approach of Corrado, Hulten, and Sichel (2005, 2006 ), we measure intangible investment and examine the contribution of intangible capital to economic growth in Japan. We find that the ratio of intangible investment to GDP in Japan has risen during the past 20 years and now stands at 11.1 percent, which is lower than the ratio estimated for the U.S. in the early 2000s. The ratio of intangible to tangible investment in Japan is also lower than equivalent values estimated for the U.S. In addition, we find that, in stark contrast to the U.S., where intangible capital grew rapidly in the late 1990s, the growth rate of intangible capital in Japan declined from the late 1980s to the early 2000s. Our conclusions regarding intangible investment in Japan remain largely unchanged even if, using data with respect to firm-specific resources, we take on-the-job training into account.     

CAN INVESTMENT IN INTANGIBLES EXPLAIN THE SWEDISH PRODUCTIVITY BOOM IN THE 1990s?

In the early 1990s the Swedish economy experienced a severe economic and financial crisis which resulted in a substantial GDP decrease. Even though the crisis was not a complete surprise for many economists, almost no one expected that the Swedish economy would be prospering with booming productivity growth only a few years later. Economists have presented three explanations for the fast recovery and productivity growth in 1995–2006: market reforms, crisis recovery, and the impact of ICT. This paper offers an alternative view, emphasizing instead firms' substantial investment in intangible assets such as R&D, design, and advertising. Based on the growth accounting framework, intangible capital accounted for more than 30 percent of the labor productivity growth in the Swedish business sector from 1995 to 2006. Thus, Swedish TFP growth, one of the highest among OECD countries, is reduced substantially when investment in intangibles is included in the growth accounting analysis.     

现代经济增长与教育发展的数学模型解析

人力资本是现代社会生产的决定因素.人力资本提高可使社会生产效益指数增长.各个学龄阶段的生均教育投入,都应随着科技知识的指数增长而增长.我国走科技先行、可持续发展的道路,2020年的高等教育毛入学率应达到50％,实现高等教育的普及化,公共教育经费占GDP的比重要在2012年达到4％的基础上继续提高,并在2020年达到4.6％至4.7％,以带动全社会的教育投入占GDP比重提高到7％.     

HUMAN CAPITAL: DETERIORATION AND NET INVESTMENT

The current practice in national accounting is to exclude from national product investment in schooling and on-the-job training, except for direct costs of schooling which are included in consumption. Foregone earnings, which form the major part of investment in human capital, go unrecorded.
Much is to be gained in consistency and analytical clarity by treating human capital like physical capital in national accounting. Estimating the amount of foregone earnings net of deterioration, that is, net investment, is a step in this direction.
Using the framework of the life-cycle hypothesis of earnings, and assuming declining-balance deterioration of human capital, estimates of deterioration rates in respect of American males by race and education level are computed for 1960. Every such d is, however, the minimum consistent with the respective costs and benefits profile. Hence an upper limit d is assumed. The model generates for each costs and benefits profile and in respect of either d , a year-by-year series of net investment in human capital. These are used to obtain two estimates (which turn out to be close to each other) of aggregate net investment in American white males in 1960. On the basis of these estimates, aggregate net investment in human capital is found to be about equal to net investment in physical assets (including consumers'durables).
It is also found that the Denison method of estimating the contribution of the increase in human capital to economic growth understates this contribution by a ratio approximately equal to net investment in on-the-job training to returns to human capital. This was about 16 percent in 1960.     

Export-led Growth in South Asia: A Panel Cointegration Analysis

Abstract

In this paper, we attempt to examine the export-led and manufacturing export-led growth hypothesis for four South Asian Countries; namely, India, Pakistan, Bangladesh and Sri Lanka, using Pedroni’s panel cointegration technique for the period 1980–2002. In this context we estimate growth accounting equations to investigate the impact of exports, manufacturing exports and other important physical and human capital variables on both total GDP and non-export GDP. The study finds long-run equilibrium relationship between GDP (and non-export GDP) and exports along with other variables supporting export-led growth hypothesis. The results also substantiate the existence of manufacturing export-led growth hypothesis. Further, we find that export, fixed capital formation, public expenditure on health and education have statistically significant coefficients re-emphasizing the importance of these variables for higher economic growth.     

Public overspending in higher education

We study the trade-off between governmental investments in pretertiary and tertiary education from an efficiency point of view. We develop a model comprising agents with different incomes and abilities, public and private schools, and public universities that select applicants based on an admission exam. Reallocating governmental resources from tertiary to pretertiary education may positively affect aggregate production and human capital if some conditions are satisfied. For instance, in an economy with a high proportion of credit-constrained students, a reallocation of expenditure toward public schools benefits many students, compensating for the negative effect of a decrease in public university investments. We also quantitatively investigate the optimal allocation of public investment between pretertiary and tertiary education, and we find that a 10% increase in productivity of public investments in pretertiary education could increase the optimal GDP between 2.1% and 3%.     

教育人力资本、健康人力资本与地区经济增长差异——基于中国省际面板数据的实证研究

在M-R-W增长模型框架下,将人力资本的内涵扩展至教育和健康两个方面。用教育收益率修正了教育人力资本指标,而健康则主要从投入角度加以测度。应用传统的固定效应模型和动态面板模型(DGMM)估计教育人力资本、健康人力资本对地区经济差异的影响。结果显示,人力资本促使全国省际间人均GDP增长出现明显的"俱乐部"收敛现象,而三大地区内部的经济增长则表现出条件收敛趋势。从教育人力资本产出弹性可以看出,东部地区经济增长的驱动力正从物质资本向人力资本方向转变。以每万人拥有床位数代表的健康人力资本促进了全国及区域范围内的经济增长。     

Optimal education and pensions in an endogenous growth model

In OLG economies with life-cycle saving and exogenous growth, competitive equilibria in general fail to achieve optimality because individuals accumulate amounts of physical capital that differ from the one that maximizes welfare along a balanced growth path (the Golden Rule). With human capital, a second potential source of departure from optimality arises, related to education decisions. We propose to recover the Golden Rule of physical and also human capital accumulation. We characterize the optimal policy to decentralize the Golden Rule balanced growth path when there are no constraints for individuals to finance their education investments, and show that it involves education taxes. Also, when the government subsidizes the repayment of education loans, optimal pensions are positive.     

Economic Growth and Investment in Education: How Allocation Matters

This article proposes an approach to answering two questions: first, does investment in education help growth; second, does the allocation of investment in education matter? I develop a model where individual ability is heterogeneous and education both trains students and reveals their suitability for further training. I use UNESCO data on educational enrollments and spending to estimate the efficiency of existing educational allocations in a panel of countries. A cross-country growth decomposition regression shows that the correlation of human capital capital accumulation and GDP growth is not significant in countries with poor allocations but is significant and positive in countries with better allocations.     

全面理解人力资本的经济价值——教育经济学与培训经济学的融合

教育经济学不应只是正规学校教育的经济学,在终身学习的理念下,正规学校教育的结束并不意味着学习步伐的停滞和人力资本投资的终结。教育经济学未来拓展的路径,除了理论基础上的"外延式"发展外,还可以在原有的人力资本理论框架内走一条"内涵式"发展的道路,即强调综合考察人力资本投资的多种途径,特别是教育和培训这两种最主要的人力资本投资形式,让教育经济学走出正规学校教育经济学的固有领地,团结在人力资本理论的名义下,与培训经济学融合,走向人力资源开发研究的广阔天地,惟其如此,才能全面、深入地研究人力资本的经济价值及其实现机制。     

人力资本与区域经济发展的计量分析

基于1990年与2000年人口普查数据,运用回归分析研究了区域人力资本指标10年间的差异及其变化趋势对地区经济发展水平变动的影响.结果表明,对人均GDP的增长率有显著影响的因素,按其影响程度由大到小依次为:平均受教育年限增长率、识字率提高率、教育投资占GDP 的比例变动和每千人医生数增长率,但它们对人均GDP影响的方向不同,这一结论不同于许多学者的总量研究结果.本文还利用因子分析进一步解释了人力资本各指标的层次结构对经济作用的影响.这对于在经济转型期深刻认识人力资本在促进区域经济发展中的作用有参考价值.     

THE TREATMENT OF INTANGIBLE RESOURCES AS CAPITAL

The author describes the results of his current research designed to measure total investment, tangible and intangible, and the derived capital stocks for the U.S., 1929–1966. With respect to total investment, the estimates show a marked increase in its ratio to GNP. All of the increase occurs in the intangible component comprising R & D, education and training, health, and mobility. The increase was concentrated in the government sector, although households increased the proportion of disposable personal income devoted to total investment.
Consistent with the relative investment trends, the stock of intangible capital grew considerably faster than the tangible stock. The growth of total capital stocks was somewhat less than that of GNP, however, in both current and constant prices. Thus, the rate of return on total capital rose somewhat over the period. Average rates of return on human and nonhuman capital were closely similar.
In real terms, the growth of total capital stocks accounted for two-thirds of the growth in real GNP, 1929–1966. One-third of the growth is attributed to residual forces, chiefly economies of scale, changes in inherent quality of human and natural resources, changes in values and motivations, and changes in rates of utilization of capacity.
The growth of the ratio of real intangible stocks to real tangible stocks accounted for less than half of the increase in total factor productivity 1929–1966. This is significantly less than the contribution of intangibles as estimated by Denison, and the author adduces several reasons why his estimates may understate the contribution. Nevertheless, it seems that the net effect of the residual forces enumerated above must also have made a substantial contribution to the growth of tangible factor productivity and real GNP over the 37-year period.     

Intangible capital,corporate valuation and asset pricing

Recent studies have found unmeasured intangible capital to be large and important. In this paper we observe that by nature intangible capital is also very different from physical capital. We find it plausible to argue that the accumulation process for intangible capital differs significantly from the process by which physical capital accumulates. We study the implications of this hypothesis for rational firm valuation and asset pricing using a two-sector general equilibrium model. Our main finding is that the properties of firm valuation and stock prices are very dependent on the assumed accumulation process for intangible capital. If one entertains the possibility that intangible investments translates into capital stochastically, we find that plausible levels of macroeconomic volatility are compatible with highly variable corporate valuations, P/E ratios and stock returns. We thank Ellen McGrattan, Edward Prescott, Rene Stulz and an anonymous referee for their helpful comments as well as workshop participants at FAME, the 5th Conference of the Swiss Society for Financial Market Research, the European Central Bank, Columbia Business School Finance Free Lunch and the University of Zürich. This research has benefited from financial support from the National Center for Competence in Research “Financial Valuation and Risk Management”. The National Centers of Competence in Research are managed by the Swiss National Science Foundation on behalf of the Federal Authorities.     

中国的GDP及其若干统计问题

本文探讨了GDP统计方法的基本概念和局限性,特别是从历史的角度分析了GDP核算体系对日益增长的无形投资(intangibleinvestment)和知识经济的忽略,并在此基础上对中国经济及其在全球经济中的地位和影响作了重新评估。文章指出,现行GDP统计方法没有包括非市场经济、地下经济和闲暇活动;低估了我国劳务等产业创造的价值及其增长潜力;无法追踪企业在技术革新、产品设计、品牌打造和员工培训这些无形资产方面的投资;忽略了我国经济中迅速增加的知识经济成份,特别是教育投资成份。文章的结论是,由于历史、文化和制度诸方面的原因,这些忽略和低估对处于转型过程中的发展中国家中国来说要远远大于发达国家和其他发展中国家,因此,我国的实际经济总量及其增长率,特别是增长潜力要远高于官方的统计数字。     

Capstone or deadweight? Inefficiency, duplication and inequity in South Africa's tertiary education system, 1910-93

This paper presents time series on South African tertiary education.The data series presented cover inputs and outputs for the university,technical training and teacher training systems. Modern growththeory has emphasised the importance of human capital, thoughempirical studies have attempted to isolate human capital impactsthrough single aggregate measures that capture only a quantityof human capital dimension. While data analysis in the presentstudy is exploratory in nature, we show that strong qualitydifferentials exist both within and between different partsof the tertiary education system. The methodological implicationfor growth studies is that fully accounting for both the quantityand quality of human capital in aggregate human capital measuresthus faces significant measurement difficulties. The data alsoestablish that discrimination in the South African tertiaryeducation was not simply a question of underresourcing of Blackinstitutions. Quality of output was low, but attaining it wasfrequently very expensive.     

Factors of production,productivity, institutions,and development: Evidence from Brazil

The economic growth and development literature emphasizes that investment in technology and physical and human capital is essential for achieving higher levels of development. Political and economic institutions are also relevant in this process. With a sample of 5,503 Brazilian municipalities, this study carries out a development accounting exercise and measures the effects of institutional quality on per capita gross domestic product (GDP), physical capital intensity, human capital stock, and productivity. The empirical results indicate that institutional quality affects GDP per capita mainly through human capital accumulation and total factor productivity.     

INTANGIBLE CAPITAL AND U.S. ECONOMIC GROWTH

Published macroeconomic data traditionally exclude most intangible investment from measured GDP. This situation is beginning to change, but our estimates suggest that as much as $800 billion is still excluded from U.S. published data (as of 2003), and that this leads to the exclusion of more than $3 trillion of business intangible capital stock. To assess the importance of this omission, we add intangible capital to the standard sources-of-growth framework used by the BLS, and find that the inclusion of our list of intangible assets makes a significant difference in the observed patterns of U.S. economic growth. The rate of change of output per worker increases more rapidly when intangibles are counted as capital, and capital deepening becomes the unambiguously dominant source of growth in labor productivity. The role of multifactor productivity is correspondingly diminished, and labor's income share is found to have decreased significantly over the last 50 years.