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TOWARDS INTEGRATED STOCK-FLOW HUMAN CAPITAL ACCOUNTS FOR AUSTRALIA
Of course, it also depends on the extent to which:
In order to provide a full account of the growth of human capital, it is necessary to establish an integrated stock-flow accounting system in which changes in the stock of human capital can be fully explained by investment and other flows in human capital.
Consistent with the choice of using the Jorgenson and Fraumeni approach to valuing the stock of human capital, this study uses the Jorgenson system of accounting for human capital, developed by Dale Jorgenson and his colleagues in the 1980s, to obtain estimates of human capital flows over periods and integrate them with the changes in the human capital stock between periods. The major features of this accounting system are summarised as follows:
The estimation of flows of human capital formation requires data on demography, education and immigration. In the short-term, these information are either directly available or could be indirectly extrapolated from data from the Census of Population and Housing. In the long-term, for refinement and reconciliation purposes, independent and more detailed data on education enrolment and completion rates are needed to derive separate estimates of investment in education. Data on migration are used to reconcile school enrolment data with estimates of transitions from lower to higher levels of educational attainment and demographic changes between different age/education groups.
Accordingly, a two stage estimation procedure has been proposed. The first stage starts with the census data and the experimental estimates of the human capital stock for the five census years from 1981 to 2001. Given data on schooling activity and recent new migrants, it could be possible to trace the changes in number of persons for each age/sex/education group between census years into three sources:
In the second stage of estimation when all data required on migration and education are obtained, detailed estimates on human capital formation and depreciation will be made and reconciled with those derived by using the census data.
If the acquisition and development of skills embodied in human beings are treated as production, the conventional production boundary as defined in the System of National Accounts could be expanded. This expansion would have a number of ramifications on the existing Australian National Accounts.
For more information, please contact Hui Wei on (02) 6252 5754.
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