The Relationship Between Human Capital, Productivity and Market Value: Building Up from Micro Evidence

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 02.10.2002, 12:15 - 13:30


Presentation by 

John C. Haltiwanger (University of Maryland)


This paper investigates and evaluates the direct and indirect contribution of human capital to business productivity and shareholder value. The impact of human capital may occur in two ways: the specific knowledge of workers at businesses may directly increase business performance, or a skilled workforce may also indirectly act as a complement to improved technologies, business models or organizational practices. Our general approach is to use newly created firm level measures of workforce human capital and productivity, and to then examine links between those measures and market value. The new human capital measures come from an integrated employer-employee dataset being developed at the US Census Bureau. We link these data to financial information from Compustat at the firm level, which provides measures of market value and tangible assets. The combination of these two sources permits examination of the link between human capital, productivity, and market value.

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