Building on an empirical approach suggested by Robert Haveman (University of Wisconsin, Madison) and on micro-data for Germany, researchers from the Ifo Institute for Economic Research in Munich provide calculations for long-term trends in the earnings capacity of the German population and its actual use in terms of employment.
Human capital is a core concept of current economics and also a driving force of economic growth. Still, measuring both the stock and the utilization of human capital is difficult. Building on an empirical approach suggested by Robert Haveman (University of Wisconsin, Madison) and on micro-data for Germany, researchers from the Ifo Institute for Economic Research in Munich provide calculations for long-term trends in the earnings capacity of the German population and its actual use in terms of employment. They also look into the composition of the aggregates by gender, age and education and amend the results with estimates on the household productivity of those not employed. They compare their findings with parallel observations from the United States and conclude with a number of policy implications.
Christian Holzner
ist Senior researcher im Bereich 'Sozialpolitik und Arbeitsmärkte' des ifo Instituts für Wirtschaftsforschung an der Universität München.