Quantitative assessment of human capital in Latvia

The importance of human capital has been a subject of discussion for several centuries. Over time, various methods for its quantitative assessment have been developed, each offering its own insights into the role of human capital in economic growth of a country. The study focuses on the case of Latvia by analyzing different types of quantitative human capital indicators. The study reviews existing methodologies used for a quantitative assessment of human capital, including indicator-based, cost-based and income-based methods, as well as six human capital indicators such as the human capital index by the World Bank, the human capital index by the Institute for Health Metrics and Evaluation, and the global human capital index by the World Economic Forum. The results show that, in five out of six indicators, Latvia ranks between the 21st and the 39th place in the world. However, some indexes offer outdated information or place a big focus only on one specific metric. Based on these findings, the authors of the paper propose a new quantitative approach for assessing human capital that integrates labour market, education and health indicators and metrics. The new approach shows that there is room for human capital potential in Latvia.