OECD Statistics Working Papers

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The OECD Statistics Working Paper Series - managed by the OECD Statistics Directorate – is designed to make available in a timely fashion and to a wider readership selected studies prepared by staff in the Secretariat or by outside consultants working on OECD projects. The papers included are of a technical, methodological or statistical policy nature and relate to statistical work relevant to the organisation. The Working Papers are generally available only in their original language - English or French - with a summary in the other.

Human Capital, Tangible Wealth, and the Intangible Capital Residual You or your institution have access to this content

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Kirk Hamilton1, Gang Liu2, 3
Author Affiliations
  • 1: World Bank, United States

  • 2: Norwegian University of Science and Technology, Norway

  • 3: OECD, France

Publication Date
28 Mar 2013
Bibliographic information

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Since income is the return on wealth, the total wealth of any given country should be on the order of 20 times its GDP. Instead the average observed ratio from the balance sheet accounts of the System of National Accounts (SNA) is a factor of 2.6 to 6.6, depending on whether natural resource stocks are included in the balance sheet. The clear implication is that the SNA wealth accounts are incomplete, with the most obvious omission being human capital. Estimating the value of human capital using the lifetime income approach for a sample of thirteen (mostly high-income) countries yields a mean share of human capital in total wealth of 62% – four times the value of produced capital and 15 times the value of natural capital. But for selected high income countries in the sample there is still an average of 25% of total wealth which is unaccounted – it is neither produced, nor natural, nor human capital. This residual intangible wealth is arguably the ’stock equivalent’ of total factor productivity – the value of assets such as institutional quality and social capital which augment the capacity of produced, natural and human capital to support a stream of consumption into the future.
human capital, Intangible Capital, Comprehensive Wealth
JEL Classification:
  • E21: Macroeconomics and Monetary Economics / Macroeconomics: Consumption, Saving, Production, Employment, and Investment / Consumption; Saving; Wealth
  • E24: Macroeconomics and Monetary Economics / Macroeconomics: Consumption, Saving, Production, Employment, and Investment / Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital