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I develop a new measure of human capital stock that has two advantages over previous measures. First, it allows for varying costs of education across time, countries, and level of education. Second, the unit of measurement is dollars, which allows comparison of human capital stocks with other macro- economic variables, including national income (GDP) and physical capital stocks. Using cross-country panel regression analysis, I find that human capital accumulation accounts for a relatively small (about ten percent) of per-capita GDP growth. I further find that, unlike physical capital, the stock of human capital as a share of GDP increases with GDP.

Do Low Human Capital Coefficients Make Sense? A Puzzle and Some Answers