Productivity, human capital and educational policies

The OECD regularly recommends to countries to reform their education and training systems. Economists refer to this as improving ‘human capital’. Yet, at the macroeconomic level, quantifying the effects of human capital on growth and productivity has often proven frustratingly elusive. A newly released OECD measure of human capital, which varies across countries and over time, works well in productivity regressions, providing the “missing” link between growth and human capital.