Human capital is the largest component of aggregate wealth, but its relation to other macroeconomic variables is murky due to the lack of market prices. Valuing human capital using historical costs or expected income is characterized by substantial measurement error. We develop a human capital...

Human capital is the largest component of aggregate wealth, but its relation to other macroeconomic and financial variables is opaque. Using historical costs or expected income, valuing human capital is characterized by substantial measurement errors. We construct a human capital index using...