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U.S. Investment in 'Human Capital' Plunges While China's Rises
THE EXTENT TO WHICH THE U.S. strengthens Americans' ability to contribute to the economy – through investments in health care and education – has dropped significantly in recent decades while comparable rankings in China have increased, according to a new report.
Expenditures in schools, training, skills and the overall health of the population has shifted dramatically in some corners of the world between 1990 and 2016, says a study published Monday in The Lancet and based on data gathered by the Institute for Health Metrics and Evaluation at the University of Washington. It seeks to better understand "human capital," a measure that includes how much education a person receives and how many years of their life they can effectively contribute to working.
Among the world's biggest economies during that time, the U.S. fell from sixth place to 27th in investing in human capital while China rose from 69th to 44th. Other economic powerhouses including Japan, Germany, the U.K. and France all stayed within four spots of their original rank.
Investment in these fields is directly tied to a country's ability to grow its economy, the study finds. A lack of advances in education is the main cause of America's lagging position, according to the study's authors.
"Human capital can be understood as the educational attainment, learning, and health status of the workforce that contribute to economic productivity," according to a statement accompanying the study. "Put another way, it is workers' collective skills, knowledge, and other intangible assets that are needed for productive work."
News reports in recent years have documented the U.S. government's flagging investments in education, which dropped 3 percent for elementary and high schools between 2010 and 2014, while other global economic powerhouses increased education spending by 5 percent on average.
Countries in Northern Europe topped the 2016 list, including Finland, Iceland, Denmark and the Netherlands, which were also in the top 10 in 1990. Taiwan earned the fifth position in the 2016 data, up from 10th in 1990. South Korea, Norway, Luxembourg, France and Belgium round out the top 10 for the latest data.
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