Human capital is increasingly believed to play an important role in the growth process; however, adequately measuring its stock remains controversial. Because the estimated impact that human capital has on economic growth is sensitive to the measures or proxies of human capital, accurate and consistent measures of human capital are needed. While many measures of human capital have been developed, most rely on some crude proxy of educational experience and are thus plagued with limitations. In this study, we adopt the lifetime labour income approach outlined by Jorgenson and Fraumeni [D.W. Jorgenson, B.M. Fraumeni, The accumulation of human and non-human capital, 1948–1984, in: R.E. Lipsey, H.S. Tice, The Measurement of Savings, Investment and Wealth, The University of Chicago Press, Chicago, IL, 1989, pp. 227–282; D.W. Jorgenson, B.M. Fraumeni, The output of the education sector, in: Z. Griliches (Ed.), Output Measurement in the Services Sector, The University of Chicago Press, Chicago, IL, 1992, pp. 303–338] to measure the monetary value of the stock of human capital for New Zealand. Jorgenson and Fraumeni's method is innovative in that it simplifies the estimation process, as well as taking into account the potential value of current schooling in addition to that of past schooling. Based on data from the New Zealand Census of Population, we find that the human capital stock of the country's employed work force grew by half between 1981 and 2001, mostly due to the rise in employment level.
