Human Capital System Evaluation in the Context of the European Union Countries

Abstract

For economic science the HC concept is known for at least the last fifty years in the works of  Schultz (1964), Becker (1962), when it were touched such issues as productivity and effectiveness of individual. Therefore, in the current economic theories it is also very important to recognize the role of human capital and its management necessity, to understand the HC formation and application as a manageable process, which you need to know well both in micro and in macro level.

Evaluation of HC in macro level should include not only the direct HC evaluation, but environmental evaluation as well. There must be evaluated not only the formal value of HC, but also the material, economical, social, environmental conditions, determining its appliance productivity and the need of systematic approach to HC.

HC system evaluation framework of individual country consists of a number of social and economic indicators, which, depending on its size and system performance are expressed in various sizes of absolute or relative indicators. The integration of these indicators into a single one, form an integrated index. For various phenomena to investigate and analyze in practice is often used the index method, which help to reveal the links and the structure between the researched phenomena (Human Development Index (Human development report 2011), the index of Genuine Wealth Assessment (Wikipedia, 2012), and so on.).

Applying index calculation method, this article aims to reveal the indicators characterizing the formation principles of HC system, creating their evaluation methodology and on its base performing a comparative HC system-level analysis among EU countries. The paper presents the main advantages of multi-factor indices method application, evaluating particular areas of social and economic activities, there is also proposed seven stages process of the HC system's integrated index formation and its practical adaptability comparing selected EU countries and determining their level of HC development.

The results of accomplished comparative evaluation of HC system in the 27 European Union countries using five groups of indices (social, innovation, consumer value - income, costs, and economic development) allowed to create an information basis selecting the effective indices, making it possible to evaluate the formation level of HC system in individual EU countries.

DOI: http://dx.doi.org/10.5755/j01.ee.24.3.2787