Scope
Part one looks at the mechanisms by which the accumulation of human capital contributes to economic growth, and evidence on the importance of these mechanisms. It is mostly based on a report commissioned by the Treasury from Paul A. David, All Souls College, Oxford and Stanford Universities, entitled “Knowledge, Capabilities and Human Capital Formation in Economic Growth”[6]. It also draws on recent empirical evidence, including an OECD cross-country study of the determinants of growth (OECD 2000b, Temple 2000, Bassanini and Scarpetta, 2001).
Part two looks at the evidence on how policies designed to influence the formation of human capital can be used to influence the distribution of income. It draws on a report commissioned by the Treasury from Daron Acemoglu, Department of Economics, Massachusetts Institute of Technology entitled “Human Capital Policies and the Distribution of Income: A Framework for Analysis and Literature Review” (Acemoglu, 2001b).
An initial focus on per capita average income and the distribution of individual incomes is useful, because it allows some quantifiable analysis of human capital effects across countries, and across time in a way that is not easily achievable for other channels by which human capital contributes to well-being.
Part three looks at the implications from Parts one and two for growth and distributional objectives taken together.
Part four considers whether and how the policy implications from Parts one and two need to be modified in light of evidence on a broader set of channels by which human capital policies influence well-being. This relies on empirical research reported in an OECD paper “The Well-being of Nations: The Role of Human and Social Capital: Human and Social Capital and Sustained Growth and Development” (OECD 2001a).
Part five describes relevant features of the level and distribution of human capital in New Zealand over time, using a variety of data sources that allow international comparisons.
Part six draws tentative conclusions about opportunities for improving well-being in New Zealand through human capital policies. It refers to current broad policy settings and outlines areas where future policy development may be most fruitful.
Notes
- [6]David (2001).
