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Torres, Raymond --- "Investing in human capital: experiences from OECD countries and policy lessons" [2004] ELECD 154; in Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris (eds), "The Economic Potential of a Larger Europe" (Edward Elgar Publishing, 2004)

Book Title: The Economic Potential of a Larger Europe

Editor(s): Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843769620

Section: Chapter 9

Section Title: Investing in human capital: experiences from OECD countries and policy lessons

Author(s): Torres, Raymond

Number of pages: 10

Extract:

9. Investing in human capital:
experiences from OECD countries
and policy lessons
Raymond Torres1

In recent years, growing interest has been expressed in human capital as an
engine of economic growth and social cohesion. The OECD is no excep-
tion in this regard. Indeed, when discussing prerequisites for economic
growth, back in 2002, OECD ministers particularly emphasized the
importance of investing in human capital. There are good reasons for this:
evidence suggests that education and training, two major sources of human
capital, are associated with better economic outcomes. The debate is now
moving beyond these overall assessments and into a policy debate: what are
the implications for policy? If human capital is so good for the economy,
why is it that market forces are not strong enough to promote investment
in this area? What are the market failures involved?
The purpose of this chapter is, first to document recent evidence on the
benefits of human capital, and second to address some of the policy issues
outlined above.


1. WHY IS HUMAN CAPITAL SO RELEVANT
IN TODAY'S ECONOMY?

Since the bulk of the existing labour force will still be in the labour market
in 10 to 15 years' time, it is important to facilitate not only initial formal
schooling, but to invest also in continuous vocational education and train-
ing. Due to rapid technological and organizational change, which necessi-
tates a constant upgrading of workers' skills and a constant change of work
practices, it has become necessary to rapidly invest ...