Challenges and New Approaches to Measuring Human Capital

Abstract

Human capital development is a product of complex and long-term integration of economic and social processes. Despite the variety of approaches in the economic literature regarding the processes of formation and use of human capital, the theoretical-methodological approaches used in the analysis of its impact on economic growth are imperfect, have many shortcomings, the obtained theoretical conclusions are not unequivocally supported by empirical data. In this regard, one of the most important problems of economic science is the development of theoretical and methodological approaches to analyze the mechanisms of influence of human capital. There is a need to develop and justify approaches to measuring and quantifying human capital. The work broadly reviews the evolution of the concept of human capital in the history of economic thought, analyzes in detail the difficulties associated with the measurement and accounting of human capital, shows in modern conditions, in practice, what methods are implemented to calculate it. As a result of research, a theoretical model has been developed, its assumptions have been determined. Instead of traditional methodological methods, the research methodology assumes the use of inductive, data-driven approach. Issues of variable specification are justified. Accents are concentrated on the qualitative indicators of the development of education and science. Dimensionality reduction machine learning algorithms and techniques, strengths and weaknesses of each approach are discussed to calculate their aggregated single rate. As a result of the analysis, specific methods are selected and the conditions and limits of their use are given. One of the obstacles to the practical implementation of the existing approach is the availability of the necessary data, depending on the countries and periods under study. Overcoming the mentioned problem consists in obtaining and replacing data with similar content, transforming and modifying similar data, or using them in a synthetic-analytical way or using other statistical methods. The presented methodology is general and thus allows for this. At the next stage of the research, the practical approbation of the presented approach is provided - the calculation of human capital indicators, the analysis of their relative and dynamic changes over time, the establishment of interrelationships with the indicators of institutional development and economic growth. Article in Georgian.