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Analysis of human capital by means of a prospective method: A study for Latin America

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  • Laverde, Henry

Abstract

This paper aims to evaluate education as a component of human capital in comparison to other types of investments that relate to the formation of this stock. First, in this study we use a nonparametric method, known as prospective, to estimate the value of human capital for a sample of ten Latin American countries from a returns perspective. Then, by means of partial decompositions the contribution made by education in the volumes of human capital is examined. Finally, a panel data model is used for evaluating the effect of education compared to other variables not explicitly included in the prospective model. The results indicate that the positive effects of education tend to be exhausted in the long run. Also, the impact of education on human capital decreases and is of a lesser quantity when compared to other forms of investment, particularly those related to health and the resources set aside for households.

Suggested Citation

  • Laverde, Henry, 2015. "Analysis of human capital by means of a prospective method: A study for Latin America," MPRA Paper 81633, University Library of Munich, Germany, revised Jul 2017.
    • Handle: RePEc:pra:mprapa:81633
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    More about this item

    Keywords

    Education; Human Capital; prospective Method; Latin-American; OLS;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • I0 - Health, Education, and Welfare - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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