Human Capital Stocks Estimates In The UK - 2004 To 2022

19th March 2024

In 2022, the value of the acquired skills and knowledge, known as the human capital stock, of the working age population living in the UK was estimated at £25.5 trillion.

Lifetime earnings grew between 2004 and 2020, although they declined for the first time in 2021 and failed to grow in 2022; this fall was largely owing to the ageing UK population and slower growth in the number of people obtaining advanced qualifications.

The gap between women's and men's per person lifetime earnings fell steadily, decreasing by 3.7 percentage points between 2004 and 2022.

Regional differences in per person lifetime earnings were at their lowest since the series began in 2004.

Between 2017 and 2022, London and the South East showed no growth in per person lifetime earnings; this contrasted with Northern Ireland and the North East, which showed the highest growth in per person lifetime earnings.

Human capital in 2022
What human capital is
This release presents the latest results on the UK's human capital.

The Organisation for Economic Co-operation and Development's (OECD) report on The Well-being of Nations: The Role of Human and Social Capital defines human capital as the measure of the "knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being". It plays an important role in productivity and sustainability, and it is one of the main impacts on individual well-being and health.

The UK's full human capital stock in 2022, accounting for the lifetime earnings of all employed and unemployed people aged between 16 and 65 years old, was £25.5 trillion. Total lifetime earnings declined for the first time since records began in 2004, in 2021, followed by no growth in 2022.

Lifetime earnings per person in 2022 were £606,000, down 0.3% from 2020 (£608,000 per person). The highest annual decline in per person lifetime earnings was observed in 2022.

As people age, their lifetime earnings decrease owing to fewer working years ahead, leading to a reduction in lifetime earnings. Figure 2 shows that the effect of ageing has generally reduced lifetime earnings each year. This reflects the increase in older members of the population. In 2004, people aged 46 to 65 years old accounted for 36.6% of the population, which increased to 40.5% in 2022. At the same time, the proportion of people aged 16 to 45 years old decreased by 3.9% from 2004 to 2022. As the proportion of younger adults decreases, there will be a negative effect on lifetime earnings.

In 2020, the negative contribution of ageing to lifetime earnings was offset by a notable 7.7% increase in the number of people with an undergraduate degree and 11.1% increase in the number of people with a Masters or PhD. Higher educational attainment correlates with higher lifetime earnings. Ageing continues to be a significant factor contributing to the longer-term trend of diminishing growth in lifetime earnings, and has not since been offset by increases in educational qualifications. Lifetime earnings per person and by qualification can be found in the associated data tables.

Lifetime earnings by sex
In 2022, women's per person lifetime earnings were 35.9% less than men's, which was the smallest difference since 2004. Between 2004 and 2022, the sex lifetime earnings gap decreased by 3.7 percentage points. The sex lifetime earnings gap varied by age group, qualification, and region, which can be found in the associated data tables.

Figure 3 highlights that the gap between women and men's lifetime earnings increases as people age. Overall, Figure 3 shows that the gap between women's and men's lifetime earnings has been decreasing over time and the gap is at its lowest since 2004.

When controlling for the effects of age and qualification level, women's lifetime earnings in 2022 were 36.1% less than men's. There were a number of possible reasons for this difference. These include, but not exclusively, the gender pay gap, employment rates, working patterns, and types of job roles.

Firstly, there is evidence of a gender pay disparity where women are paid less than men on average. In 2022, women were paid 14.4% less on average than men per hour of work (see our Gender pay gap in the UK bulletin for more information). The pay gap increased with age, which reflects the findings in Figure 3, whereby the youngest age group (those aged 16 to 25 years) had the smallest difference in women and men's pay, and the oldest age group (those aged 56 to 65 years) had the greatest difference in women and men's pay.

A similar proportion of women and men were in employment in 2022; 71.9% of women and 78.6% of men were in work (see our Employment in the UK bulletin for more information). However, a greater number of women worked part time. By working part time, a person's total earnings are proportionally less than if working full time. In 2022, 6 million women worked part time and 2.37 million men worked part time; therefore, the impact was greater on women's lifetime earnings (see our Labour market statistics time series for more information).

A greater number of women (25.2%) were economically inactive in 2022 compared with men (18.1%). There can be many reasons for this, including full-time education, health and caring responsibilities, amongst other factors (see our Employment in the UK bulletin for more information). As fewer women were in employment, this will have reduced lifetime earnings estimates for women.

Finally, there is evidence to suggest that compared with men, fewer women aged over 40 years old were in managerial or professional jobs. These roles were typically higher paid, which therefore offers some explanation as to why women's lifetime earnings were less than men's (see our Families and the labour market, UK article and our Gender pay gap in the UK bulletin for more information).

In contrast, for the first time, in 2020, it was more common for both parents to work full time as opposed to one working full time and one working part time (see our Families and the labour market, UK article for more information). As the age of the youngest child increased, more mothers worked full time. In 2021, 30.8% of mothers with a child aged one year worked full-time, compared with 40.4% of mothers with the youngest child aged 9 years old. Over time, the rise in full-time working parents may have a long-term effect on lifetime earnings, which we will continue to monitor.

Read more details and see the graphs HERE