Human Capital Development interplaying with Demographics

Compatriot Prof. Dr. Wolfgang Lutz, founder and head of “Wittgenstein Center for Demography and Global Human Capital“, Vienna defines Human Capital as the Mathematics of = Population x Education (x Health). Education being the most important source of observable population heterogeneity after sex and age of demographic groups. I would like to summarize his extensive work basically by referring to the featured image for this blog in which he illustrated the 3 main drivers of Demographic Metabolism: CER standing for a Constant Enrolment Rate of Education among a country’s population, GET for Global Education Trends and FT for Fertility Trends. GET having been being supported by most political regimes through socialized or at least affordable education schemes for its populations has led to improved access to information about health and increased female education reducing fertility of societies, reflected via FT. In all countries studied by IIASA under his conduct since 1994, affluence evolved exponentially to Human Capital stock increases. For example looking at the Education stock-flows of Singapore, Korea or Mauritius over the last 50 years significance of policies for education expansion through their effect on the future educational attainment of young women, significantly influence medium to long term paths of population growth for individual countries and the world as a whole. Better educated men and women seem to have lower mortality rates and their children’s mortality decreased. In view of the 17 UN-Sustainability Development Goals [SDGs] world population increase may potentially be leveled off by women with more education having fewer children, both because they want fewer and because they find better ways to pursue their own goals.

Lutz describes today’s world demographics being just divided by time shift of different stages of Human Capital stocks across the globe, meaning that societies of currently lower average formal education stocks (in quantity, quality and content) are likely to catch up with where other parts of the world population at more distinctive Human Capital levels are standing today. Of course nobody knows today, which groups will be most vulnerable to potential Climate Changes ahead of us. And worried parents of teenagers in the USA about its ever less affordable privatized tertiary education system adumbrate potential setbacks in the currently still biggest economy’s Human Capital achievements. Unfortunately this coincides with a potential disavowal of Climate Change by its new elected presidency, likely to further delay enhancing climate adaptation by education. While school enrolment has decreased across several African countries over the last decade, threatening to fall back into excessive population growth extraordinarily tensed by dwindling resources and at least very likely additional stress from Climate Change. The consequences will most likely result into an immense pressure on Europe, potentially leveling out Human Capital achievements across these two neighbor continents by migration.

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