Estimating Human Capital Stock In Korea

Abstract

This paper presents a labor income based measure of Korea's human capital stock from 1963 to 2000.  For this purpose, I use all available basic statistics to compile consistent time series data on wage rates, average working hours by industry, composition of workers cross-classified by industry, educational attainment, sex, and class of employment.  I present of estimates of human capital stock for all industries without considering class of employment and considering class of employment.  Because the wage data for self-employed and family workers are not available, I devise estimates of human capital stock separately depending on the assumption for the wage differential by class of employment.  In the case of all industries without considering class of employment, the aggregate volume and quality of labor input increased at an average rate of 3.73 percent and 0.84 percent per year, respectively, during the 1963-2000.  Consequently, approximate 23 percent of the growth of labor volume can be attributed to improvement in labor quality from 1963 to 2000.  When 75 percent of the wage rates of employees is assumed to apply for unpaid workers, the aggregate volume and quality of labor input increased at an average rate of 3.99 percent and 1.10 percent per year, respectively, during the 1963-2000 in all industries with considering class of employment.  Consequently, approximate 28 percent of the growth of labor volume can be attributed to improvement in labor quality during the 38 years period.