Measuring the State of America's Human Capital

Did the recession of 2007-09 destroy human capital by cutting short some people’s careers and delaying others’ from getting started? Or did it increase human capital by inducing young people to stay in school and get more education?

Few issues are more important for long-term growth. In November an article by staff members of the Federal Reserve Board of Governors questioned whether the recession may have permanently depressed U.S. gross domestic product. That’s because less capital is invested when the economy contracts. While physical and intellectual capital such as machinery and software get most of the attention, people power is a more important factor. As plants and equipment have economic value, human capital represents people’s ability to produce things of value.