A great post with a great graphic from Alex Tabarrok on human capital.
The BEA estimates that a $738 trillion human capital stock dwarfs the $45 trillion physical capital stock. Even if you estimate human capital stock more conservatively, the difference is still massive.
Still putting some ideas together, but I hope to be exploring these issues in more detail with a grant proposal I'm writing to the Sloan Foundation with my co-author on the NBER engineering work. If we get this (he already has a relationship with and grants from them, so I think its a good bet), I will hopefully be able to replace my teaching assistantship stipend with this grant money and have a stream of support through my dissertation writing too.
The literature I'm interested in is science and engineering occupation and schooling decisions, questions of whether expectations about the return on those investments are myopic (some of the earlier work by Richard Freeman) or more rational (more recent work by Sherwin Rosen). In addition to data on actual labor market conditions in these fields, our data has information on student expectations of their own labor market outcomes, as well as detailed information on how they finance their education. Anyway - we are moving out of the industrial age. Human capital stock is what really matters in economies like ours.
Now that I've given that summary, I'm also curious - does anyone know of any applications of Tobin's q to thinking about human capital investments? It seems like it would be really straightforward to apply it, but so far in a little searching around I haven't turned up anything.
Multipliers: What We Should Have Known
2 hours ago