Economists use the term capital deepening to describe an increase in the amount of capital per worker in the economy. Joao Paulo Pessoa and John Van Reenen argued that the UK’s fall in productivity was due to its opposite, capital shallowing. In other words, falling wages allow firms to substitute people for capital and the capital per worker falls.
But do these concepts apply to human capital? I recently came across the ONS Human Capital Estimates, released a few months ago. The ONS has a methodology for calculating the stock of human capital in the UK. This involves making an assessment people’s of earnings, skills and qualifications then using it to calculate lifetime labour income. This, taken together, gives a value for the UK’s stock of human capital. (I have tried to summarise an entire paper with a few sentences. The full explanation is here.)
According to the ONS calculations, human…
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Utopia, you are standing in it! 
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