China's Taiwan Region Human Capital Measure Research

This paper reviews the market-based human capital stock between2005and2010for Taiwan,provides an overview of its human capital stock, and offers an estimated sum of lifetime incomefor all individuals by the method introduced by Jorgenson and Fraumeni. Our findings are listed asfollows:1. Most human capital indicators for Taiwan are quite comparable when compared with thoseof for the OECD countries, which include a39.9%of population at age of25to64possessing atertiary level of education and a73%of total population possessing a senior high-school level ofeducation in2011. Besides, no significant differences are found for educational level betweenmales and females, indicating opportunities for education are offered universally and equally allnationwide. Our analyses also reveal well human capacity such as TIMSS and PISA forTaiwanese manpower and11.6R&D personnel per thousand employees, which is proportional tothose of New Zealand, Japan, and Singapore. However, the education expenditure of Taiwan as apercentage of GDP is only5.72%, significantly lesser than that of the average of the OECDcountries (6.30%).2. Modified Jorgenson&Fraumeni method is used to determine annual discount rate andhuman capital stock for650series of data, which control for the following covariates: gender, age(65categories), and educational level (5categories). The study results show an annual discountrate of3%, an income growth rate of1.63%, and the total market value of human capital stock of153.96to174.6trillion, with an average annual growth rate of0.03%. In addition, the averageannual growth rates of human capital for male and female are-0.47%and2.05%, respectively,which indicates a trend to increase human capital for female. In2010, more than50%of thehuman capital stock of Taiwan was attributed to the population with highest educational level, inwhich31.94%and20.64%were ascribed to males and females, respectively.3. The ratio of human capital stock to GDP for Taiwan is around12.16to14.15, showing adownward trend which is consistent with the results of American and Chinese studies. If the totalhuman capital of the working-age population (15~64age) is used, the ratio becomes9.13to10.14,which is comparable to that of Australia’s.Our findings confirm that the ratio of human capital stock to GDP between2005and2010for Taiwan is around6to30. A downward trend is noticed, indicating the ratio in the early yearsmight be close to30. The ratio might differ according to the different development stage of thenation. For instances, higher efficiency of human capital might be seen for the developed countriessuch as Norway, Australia, New Zealand, and Canada. The ratio of human capital stock to GDPmight become lower accordingly. Besides, lower efficiency of human capital might be seen for thedeveloping countries such as China, and a subsequent higher ratio of human capital stock to GDPwould be expected.